Andhra HC (Pre-Telangana)
J.M. Baxi And Co., A Firm Registered ... vs The Board Of Trustees Of The Port Of ... on 13 September, 2007
JUDGMENT P.S. Narayana, J.
1. Facts in brief:- The 3rd plaintiff in O.S.No.89/81 on the file of I- Additional Subordinate Judge, Visakhapatnam, had preferred this appeal being aggrieved of the Judgment and Decree dated 31-12-1991. The 1st respondent herein - the Board of Trustees of the Port of Visakhapatnam represented by its Chairman, is the defendant in the said suit. Respondents 2 and 3 are plaintiffs 1 and 2 in the said suit.
2. The said suit was filed for declaration that all claims, if any, of the defendant against the plaintiffs are discharged, extinguished, barred by law of limitation and/or not enforceable in law, arising out of the incident on 26th October, 1976, and that in any event the plaintiffs are not liable for any damage arising out of the incident on 26th October, 1976, for a decree against the defendant and in favour of the plaintiffs for a sum of Rs.17,54,652-05 ps., with further interest at 18% per annum on Rs.16 lakhs from the date of the suit till the date of realization, for recovery of sum of Rs.17006-39 ps., with subsequent interest @ 18% per annum on Rs.15,923-20 ps., from the date of the suit till the date of realization, for a permanent injunction restraining the defendants from taking any steps to recover any amount under the bill dated 22- 10-1980 claiming an aggregate amount of Rs.28,90,985-35 ps., and after adjusting a sum of Rs.16,00,000/- claiming the balance amount of Rs.12,90,985-35 ps., and alternatively to adjust the amount from the regular deposit account maintained by the 3rd plaintiff, or in the alternative to prayers (a) & (b) to direct the Commissioner of this Court to take accounts and assess the damage if any and direct the defendant to refund to the plaintiffs the said sum of Rs.16,15,923-20 ps., together with interest on the sum of Rs.16 lakhs from the date of encashment of the Bank guarantee on the sum of Rs.15,923-20 ps., from the dates plaintiff adjustment of the same from the 3rd plaintiff's deposit account, till realization.
3. The learned I-Additional Subordinate Judge, Visakhapatnam, in the light of the respective pleadings of the parties, having settled the issues, recorded the evidence of P.W.1, P.W.2, D.Ws. 1 to 6, marked Ex.A.1 to Ex.A.77, Ex.B.1 to Ex.B.10, Ex.X.1 to Ex.X.8 and decreed the suit partly as hereunder:
(a) that, the defendant - Port Trust is hereby restrained from collecting Rs.7,81,375-00 out of Rs.12,90,985-35 ps., as demanded under Ex.A.10 - the bill prepared by the defendant;
(b) that the defendant - Port Trust be at liberty to collect Rs.5,09,610-35 ps., from out of Rs.12,90,985-35 ps., from the plaintiffs;
(c) that, so far as the other reliefs are concerned, the suit be and the same is hereby dismissed;
(d) that, so far as the reliefs granted to the plaintiffs, the defendant-Port Trust do pay to the plaintiffs a sum of Rs.21,371-00 towards proportionate costs of the suit; and
(e) that, so far as the reliefs dismissed in the suit, the plaintiffs do pay to the defendant-Port Trust a sum of Rs.7588-00 towards costs in contesting the suit.
Aggrieved by that portion of the Decree, negativing the reliefs, especially granting liberty to the 1st respondent-defendant to collect Rs.5,09,610-35 ps., from out of Rs.12,90,985-35 ps., from the plaintiffs, this appeal had been preferred.
4. Contentions of Sri N.V.Suryanarayana Murthy:- Sri N.V.Suryanarayana Murthy, the learned senior Counsel representing appellant-3rd plaintiff had taken this Court through the respective pleadings of the parties, the evidence available on record and the findings recorded by the trial Court and also had drawn the attention of this Court to different provisions of the Major Port Trusts Act, Merchant Shipping Act, Indian Contract Act and would comment that the appellant-3rd plaintiff is only an agent and an agent cannot be fastened with any liability at all. The Counsel also while elaborating his submissions had distinguished the decisions which had been relied upon in this regard. The learned senior Counsel also pointed out that on facts, the decision of the Apex Court in Transworld Shipping Services v. Visakhapatnam Port Trust (2004) 13 SCC., 726 is distinguishable since there is a specific letter of undertaking in the said case whereas the same is absent in the present case. The Counsel also had drawn the attention of this Court to Section 131 of the Mayor Port Trusts Act, 1963, and would maintain that in the absence of any specific counter claim, giving a positive direction or liberty permitting the 1st respondent-defendant to deduct a portion of the amount definitely cannot be sustained. The Counsel also referred to Ex.A.10 and Ex.A.26 in this regard.
5. Contentions of Sri K.Srinivasamurthy:- Sri Srinivasamurthy, the learned Counsel representing respondent-defendant had pointed out to the respective pleadings of the parties and the evidence available on record and would comment that this is not just like any other ordinary contract governed by the Indian Contract Act but the same is governed by the Major Port Trusts Act and Merchant Shipping Act. The Counsel also pointed out to the relevant portions of the findings recorded by the trial Court on the aspect of jurisdiction of the Civil Court and would comment that since the learned senior Counsel had not argued this aspect, the same need not be elaborately argued. The Counsel also further pointed out to the findings recorded by the trial Court on the question of limitation and would comment that since the Counsel representing appellant had not argued this point, this question also need not be elaborately argued. The learned Counsel however would submit that even if the evidence of P.W.1, P.W.2, D.Ws. 1 to 5 and the documentary evidence available on record, in general, Ex.B.1 to Ex.B.10, Ex.X.1 to Ex.X.8, Ex.A.10,Ex.A.34, in particular, it cannot be said that the trial Court had recorded any incorrect findings. The Counsel also explained the aspect of bank guarantee and would maintain that the agent in the present case acted everywhere on behalf of the owner and hence the agent cannot escape the liability in relation to the acts of negligence on the part of the owner. The Counsel also pointed out to Ex.A.73 and also Ex.A.75 and made elaborate submissions. Incidentally, the Counsel also pointed out to a decision in Transworld Shipping Services (I) Pvt.Ltd., Mirpuri House, Soldierpeta, Visakhapatnam, rep. By its manager Mr.S.Rajagopalan v. Visakhapatnam Port Trust, Visakhapatnam, rep. By its traffic managerW.P.No.5732/1986 of High Court of A.P. and also would comment that W.P.No.3829/86 had been referred to at page No.8. The Counsel also pointed out to the decisions on the point in G.W.R. v. Mostyn (Owners) (1927) All England Law Reports, 113 and Workington Harbour v. S.S. Towerfield (1950) 2 All England Law Reports 414. The learned Counsel also would point out that as per the regulations of the 1st respondent-defendant read with Section 123 of the Major Port Trusts Act, agent also is liable and in the present case, the appellant is an agent and a Power of Attorney as well. The learned Counsel also would submit that in the peculiar facts and circumstances instead of driving the 1st respondent-defendant to yet another suit, liberty had been given to make proper deduction. On the aspect of undertaking, the Counsel pointed out to Ex.A.34 wherein it was specified that the bank guarantee would be subject to the finalization of the final bill and the contents of this document being very important if this aspect is taken into consideration, the principal stand taken by the Counsel representing appellant that 3rd plaintiff being an agent cannot be made liable in the facts and circumstances, definitely cannot be sustained.
6. Heard the Counsel on record, perused the oral and documentary evidence available on record and also the findings recorded by the trial Court.
7. Pleadings of the parties:
Averments made in the plaint:
The first plaintiffs are the owners of a ship M.v. 'LALINDA', hereinafter referred to as the said Vessel and the second plaintiffs are the Managers and General Agents of the first plaintiffs in regard to the said Vessel, while the third plaintiffs are the agents of the plaintiffs 1 and 2 in India at the relevant time and particularly of the said vessel M. v. 'Lalinda'.
The said vessel in ballast arrived at the Port of Visakhapatnam owned, managed and controlled by the defendants under the provisions of the Major Port Trusts Act, 1963, on 26th October, 1976 at 10.50 hrs for loading a consignment of Manganese Ore. The said vessel and the plaintiffs 1 and 2 were represented at the relevant time by their Agents in India, Messers J.M. Baxi & Co., the third plaintiffs herein and were under the control and management of second plaintiffs.
As is the practice in the Visakhapatnam Port, the said vessel was under the control and directions of a pilot of the defendants and it was under such control and guidance of the said pilot that the vessel was brought from the anchorage to the berth of the Port of the defendants, on 26th October, 1976. The Port Trust's Pilot, one Mr.B.K.Das under the employment of the defendants, boarded the said vessel and took control at 1303 hours on 26th October, 1976 until the vessel was brought along side Q-1 berth and made fast. At 1405 hours, two tug boats, SOURI and DOLPHIN of the defendants made fast to the vessel's fore and aft. All instructions of the Pilot were carried out by the Master of the vessel from time to time and in accordance with such compliance the other officers and crew of the vessel also carried out instructions. At 1415 hours, two tug lines broke off and at 1415 1/2 hours the ship's head collided with the Jetty. The plaintiffs say that the collision with the Jetty was only due to the gross latches and negligence of the defendants and their Pilot. On the same day, the Master of the said vessel sent a Protest Note that the Deputy Conservator of the defendants stating therein that the accident was due to the negligence of the Pilot. As against this, the Deputy Conservator of the defendants issued a notice dated 27th October, 1976 to the Master, holding the Master responsible for the alleged damage to the Jetty.
The Deputy Conservator in his letter dated 27th October, 1976 purported to provisionally estimate the cost of damage at Rs.16,00,000/- and required the Master to deposit the said sum of Rs.16,00,000/- and reserved his right to detain the vessel in Port subject to the said deposit. The Agents, by their letter dated 2nd November, 1976, intimated the Deputy Conservator petition defendants that the said Agents would give a Bank Guarantee for Rs.16,00,000/- without prejudice and under protest and without accepting any liability for the alleged damage and/or the quantum thereof. The defendants, by their letter dated 5th November, 1976 informed the Agents that they will accept a Bank Guarantee for Rs.16,00,000/- from a local scheduled bank, provided the said guarantee was directly in accordance with the proforma supplied by the defendants. The defendants also sought an undertaking from the Agents to pay the actual amount of damage in cash within seven days from the date of demand. A copy of the said letter dated 5th November, 1976 is annexed hereto as Exhibit- A. The plaintiffs say that as on that day the alleged damage or the quantum thereof had not been ascertained and the liability had not been fixed on the plaintiffs or liquidated and the amount of Rs.16,00,000/- was only provisional subject to the defendants ascertaining and assessing the actual damage, if any, caused to the Jetty on account of the collision, referred to above. The plaintiffs submit that the letter of 5th November, 1976 makes it clear that the defendants would at a subsequent date assess the damage, if any caused, ascertain the damage and liquidate the amount and where after would call upon the plaintiffs or their Agents to pay the same and that the plaintiffs or their Agents should, within seven days from the date of receipt of the said letter, pay such amount as is called upon.
Thereafter, correspondence ensued between the plaintiffs' Agents and the defendants through their respective legal advisors where the 3rd plaintiff contended that the defendants were not entitled for an unconditional guarantee as reflected in the proforma and the defendants should refrain from detaining the vessel on the plaintiffs; agents producing a Bank Guarantee for an amount not exceeding Rs.16,00,000/- subject to a condition that the guarantee would be enforced by the defendants after the liability and quantum of damage if any is ascertained and adjudicated upon by any Court of law or Tribunal or by Arbitration or by mutual negotiation and agreement between the parties. The defendants contended that purportedly under Regulation 42 of the Visakhapatnam Port Dock Regulations, 1967, the defendants were entitled to demand an unconditional Bank Guarantee and that the demand of the defendants cannot be subjected to adjudication.
Being aggrieved by the arbitrary demand of the defendants, the plaintiffs represented by their Agents, filed a Writ Petition in W.P.No.3829 of 1976 in the High Court of Andhra Pradesh under Article 226 of the Constitution of India, seeking a Writ of Mandamus or such other appropriate Writ or direction to direct the defendants to permit the said vessel to sail upon the plaintiffs executing a Guarantee for Rs.16,15,000/- as per the Draft appended to the said petition. The said petition was contested by the defendants. The plaintiffs crave leave of this Hon'ble Court to refer to and rely on the petition and the various Affidavits filed on behalf of the plaintiffs and the defendants in the said petition and the documents produced therein, when produced.
Pending hearing and final disposal of the said petition, the defendants were directed to release the said vessel on the plaintiffs furnishing a Bank Guarantee in the sum of Rs.16,15,000/- subject to determination of liability and the quantum of damage by a Court of competent jurisdiction and mutual agreement pending further orders by the Hon'ble High Court. The plaintiffs crave leave of this Hon'ble Court to refer to and rely on the said order dated 25th November, 1976 of the High Court of Andhra Pradesh, when produced. The defendants applied to the Hon'ble High Court for an amendment of the order referred to above, on which the Hon'ble High Court was pleased to direct that the plaintiffs would undertake to the Hon'ble High Court to execute a modified Bank Guarantee if so directed at the hearing and final disposal of the petition. In accordance with the said directions, the plaintiffs executed and got executed a conditional Bank Guarantee dated 26th November, 1976 and an undertaking to the Hon'ble High Court whereupon the said vessel was permitted to sail and the vessel in fact sailed on 4th December, 1976. A copy of the Bank Guarantee executed by the plaintiffs through their Bankers and a copy of the order dated 3rd December, 1976 of the High Court of Andhra Pradesh are annexed hereto as Ex.B. and Ex.C. On 7th November, 1977, the Hon'ble High Court of Andhra Pradesh, by a Judgment and an order, was pleased to dismiss the said petition on various grounds and in accordance with the undertaking the plaintiffs were directed to furnish a Bank Guarantee on the same terms as executed by the Agents of the plaintiffs in another case, which was in accordance with the proforma as required by the defendants. The Hon'ble High Court further stated that the Bank Guarantee was without prejudice to the contentions of the plaintiffs in a suit which they may file or to the interlocutory orders that may be passed in such a suit. It was also made clear that none of the observations in the Judgment shall prejudice the contentions to be raised by the plaintiffs in the suit proposed to be filed by them. The plaintiffs crave leave of this Court to refer to and rely on the said Judgment and Order, when produced.
The plaintiffs preferred an Appeal, being Writ Appeal No.585 of 1977, to the Division Bench of the Hon'ble High Court of Andhra Pradesh. Pending the said Appeal, the defendants were restrained from encashing the Bank Guarantee by an Order of the Hon'ble High Court dated 23rd November, 1977. Ultimately, by a Judgment and Order dated 17th January, 1978, the Hon'ble High Court was pleased to dismiss the said appeal. The plaintiffs crave leave of this Hon'ble Court to refer to and rely on the said Appeal proceedings and the order, when produced.
In pursuance of the earlier order of the learned Single Judge of the Hon'ble High Court, the plaintiffs, through their Bankers, obtained a Guarantee in favour of the defendants in accordance with their proforma. A copy of the said Guarantee dated 15th November, 1978 is annexed hereto as Ex.D. The said Guarantee was thereafter renewed from time to time when called upon by the defendants, which was in compliance with the orders of the High Court referred to above.
The plaintiffs crave leave of this High Court for a true and correct interpretation and construction of the said Guarantee and on such true and correct construction, the Guarantee, in terms, amounts to a Surety and/or an indemnity whereby the Bankers have agreed to pay the amount claimed and demanded by the Defendants provided the said demand is not paid by the plaintiffs within seven days and provided the plaintiffs question the demand, and provided the plaintiffs are primarily liable and the liability is not barred by law of limitation and/or otherwise discharged.
The plaintiffs say that the defendants have no authority of law to unilaterally or arbitrarily assess and claim any amount of damage and even according to the order of the Hon'ble High Court of Andhra Pradesh such demand and/or quantum and/or liability was always subject to a judicial scrutiny and review. The said order of the Hon'ble High Court further clarifies that when such a demand is made, it is open to the plaintiffs to file a suit against the defendants contending that the there was no liability and/or disputing the damage. From the construction and true interpretation of the circumstances under which the Guarantee was executed complying with the direction of the Hon'ble High Court, the position that would emerge is as follows:
(a) That the plaintiffs would execute an unconditional Bank Guarantee
(b) The defendants would thereafter proceed to ascertain and asses the quantum of damage.
(c) The defendants would call upon the plaintiffs to make payment.
(d) The plaintiffs would have liberty to file a suit or appropriate proceedings contesting liability and/or quantum of damage and obtain appropriate interlocutory orders.
(e) The Bank Guarantee would be subject to the orders passed in the said suit. The plaintiffs submit that the defendants did correspond with the plaintiffs' representatives after having ascertained the damage to their tug "SOURI" when they claimed a sum of Rs.10,934.35 by their Bill dated 16th October, 1979. A copy of the said bill is annexed hereto as Ex.E. Thus the only amount assessed and ascertained as due and payable by the plaintiffs to the defendants in regard to the said incident on 26th October, 1976 is a sum of Rs.10,934.35 for the alleged damage caused to the tug "SOURI" of defendants. The plaintiffs deny that they are liable for the said damage and the plaintiffs dispute the correctness of the quantum of damage as assessed by the defendants. The defendants had also raised a demand on the said Agents by their Bill dated 14th March, 1978 for a sum of Rs.4,210.75 for alleged damage caused to the tug "DOLPHIN". The defendants further adjusted the sum of Rs.4,210.75 by debiting the Agents' Deposit Account. The plaintiffs deny the said two liabilities and the quantum thereof.
The collision took place on 26th October, 1976 and that is when the damage if any was caused. The plaintiffs state that till expiry of three years period of Limitation from the date of damage, i.e., 26th October, 1976, the defendants have not ascertained or assessed the quantum of damage to the Jetty or any other installation other than damage to the two tugs, as referred to above nor have made any demands on the plaintiffs. The plaintiffs deny any liability. The defendants have not demanded any amount as being due and payable for the alleged damage save and except the damage to the tugs as aforesaid, from the plaintiffs or their Agents or representatives, till the date of expiry of Limitation of three years from the date of damage. Without prejudice to the contention of the plaintiffs that they are not liable to pay any damage whatsoever in respect of the incident on 26th October, 1976, the plaintiffs state that the cause of action if any for recovering damages for any alleged damage arising out of the incident on 26th October, 1976, in law arise in favour of the defendants and against the plaintiffs on 26th October, 1976 when the incident took place from which the alleged damage arose. On 26th October, 1979, that is, on the expiry of a period of 3 years, any claim for damage arising out of the incident on 26th October, 1976 would be barred by law of limitation and therefore beyond the 26th October, 1979, the defendants, in law, have no claim or cause of action against the plaintiffs and all claims by defendants if any prior to 26th October, 1979 are extinguished and/or discharged by efflux of the period of Limitation. As aforesaid, the plaintiffs reiterate that the right to recover any amount under the Bank Guarantee, Ex.D., would accrue in favour of the defendants only if there is a primary liability by the plaintiffs to the defendants and the quantum thereof is liquidated and ascertained and such quantum is legally enforceable by way of debt or due against the plaintiffs and in favour of the defendants and the liability is not barred or discharged. The said Bank Guarantee is only an Indemnity to indemnify the defendants if they are not able to recover the said amounts on demand from the plaintiffs. In law, in order to enable the defendants to recover any amount under the Bank Guarantee, the damage must have been assessed and ascertained and liquidated. Inasmuch as such damage is not assessed or ascertained by the defendants and no demand has been made on the plaintiffs or their Agents or representatives and not even an intimation is sent that any amount has been so ascertained or assessed prior to 26th October, 1979, all rights of the defendants against the plaintiffs and their agents as also arising under the Bank Guarantee are extinguished and in any event, the defendants have no legal authority to enforce the recovery of any amount from the plaintiffs or arising out of the Bank Guarantee got executed or obtained by the plaintiffs in that behalf. The appropriation of the Bank Guarantee amount is an unlawful and unauthorized gain. The plaintiffs state that the Bank Guarantee in terms states that it shall continue to be enforceable till all the dues of the defendants by virtue of the order of the High Court had been fully paid and its claim satisfied or discharged. All the claims by the defendants stood discharge from the 26th October, 1979, and therefore no amount was payable under the said Guarantee.
The plaintiffs submit that in accordance with the orders of the Hon'ble High Court, the plaintiffs were obliged to extend the Guarantee from time to time. For the fear of being involved in action for contempt of the Hon'ble High Court and in reverence to the Orders of the Hon'ble High Court, the plaintiffs extended the Guarantee from time to time and the Guarantee stood extended till 14th November, 1980. the plaintiffs state that the however the defendants were entitled to claim any amount under the guarantee only if the primary liability of the plaintiffs is not discharged and the claim of the defendants against the plaintiffs is enforceable in law. As stated above, the defendants' right to enforce recovery from the plaintiffs in regard to the incident dated 26th October, 1976, stood barred by limitation on 26th October, 1979, by efflux of limitation and therefore, the defendants wee not entitled to encash any amount under the said Guarantee. In any event, extending Bank Guarantee to comply with the undertaking referred to above to the High Court does not amount to any acknowledgment.
The defendants, without any authority of law, and unilaterally, arbitrarily and surreptitiously and malafide and without ascertaining or assessing the amount of damage, called upon the Bankers who had executed the said Guarantee to pay to the defendants the sum of Rs.16,00,000/- which amount, without any reference to the plaintiffs, was forthwith paid by the said Bank to the defendants. In the circumstances as aforesaid, the plaintiffs are entitled to recover from the defendants a sum of Rs.16,00,000/- together with interest at 18% per annum on the said amount from the date of recovery by the defendants of the said amount of Rs.16,00,000/- till realization being the amount malafide and unlawfully recovered by the defendants from the plaintiffs' Bankers without a right to enforce any debt or claim in favour of the defendants on the plaintiffs. The plaintiffs say that in any event the defendants are not entitled to retain the said amount unless there was any liability due to the defendants from the plaintiffs and such retention would amount to unlawful conversion of the security by the defendants. The said retention is without authority of law and malafide.
Without prejudice to the above and in the alternative, assuming that this Hon'ble Court comes to a conclusion that the claim of the defendants is not barred by law of Limitation, the plaintiffs say that in any event the plaintiffs are entitled to a declaration that the plaintiffs are not liable for any damage arising out of the said incident on 26th October, 1976, for the damage is not the proximate result of any act or omission by the plaintiffs and/or their Agents or their employees and is a result of acts or omissions on which the plaintiffs had no control.
Without prejudice to the above and if this Hon'ble Court comes to the conclusion that the plaintiffs are liable in law, the plaintiffs say that the quantum of damage not having been ascertained, the defendants are not entitled to claim any amount. In any event, the plaintiffs dispute the said claims, in liability and quantum.
Since the Jetty and installations are under the direct control, supervision and management of the defendants, the defendants alone are in a position to ascertain or assess the damage if any and it will not be possible for the plaintiffs to negatively establish that there is no damage and/or dispute the quantum of damage if any, unless the details of ascertainment are made available.
Without prejudice to the above and in the alternative, the plaintiffs say that the plaintiffs' representatives appointed an Engineering Consultant to make enquiries and investigations and in accordance with the same, Mr.D.Hariharan, Building Technologist and Construction Consultant, attached to the Department of Civil Engineering of the Indian Institute of Technology, Madras, undertook detailed investigations and submitted his report on 22nd/23rd September, 1980, a copy of which is annexed hereto as Ex.F. These investigations were hampered due to the total non-cooperation of the authorities of the defendants and suppression of material records by them, but however, in conclusion have stated that the Jetty was inherently unsound. He further stated that if further investigations are carried out, it can be proved that the original structure was founded on an unsound pile work and that therefore no liability would be attached to the ship owner, for reinstatement of the property. The plaintiffs crave leave of this Hon'ble Court for a true and correct interpretation of the said investigation.
The plaintiffs say that it is entirely up to the defendants to satisfy this Hon'ble Court and it is necessary that a Commissioner be appointed by this Hon'ble Court to assess and ascertain the damage if any caused to the Jetty and apportionment of the quantum between the plaintiffs and the defendants for damage if any. The plaintiffs state that the property if any damage was already sufficiently damaged, badly constructed, depreciated and was of no value and the incident in question was only an accident which resulted in the exposure of the actual and substantive damage already existing in the structure. The plaintiffs state that no damage had been caused by the collision on 26th October, 1976, and in any event no damage could have been caused inasmuch as the Jetty was already in such a dilapidated condition that it would have collapsed in the ordinary course even without the said collision. The existing damage to the Jetty and the inherent defect in the foundation thereof even before the collision is conspicuously eloquent from the conduct of the defendant in secreting and suppressing essential particulars and materials from the plaintiffs. In any event, by such suppression and secreting of materials, the defendants are estopped in law to claim any damage from the plaintiffs.
In the circumstances as aforesaid, the plaintiffs state that (a) the plaintiffs are not liable for any damage to the defendants; (b) the liability, if any is extinguished and discharged and the defendants are not entitled to enforce any claim against the plaintiffs; (c) the quantum, if any, not having been ascertained till the expiry of the period of limitation, the defendants are not entitled to recover any amount from the plaintiffs; (defendant) the defendants having prevented the plaintiffs from assessing the damage by themselves through their investigators, are estopped from making a claim in respect thereof; (e) even if there is any liability the quantum cannot exceed a very paltry amount in comparison to the Guarantee amount; and (father) the Defendants are not entitled to recover the amount under the Guarantee, the same being in the nature of an Indemnity, and being an unlawful gain and malafide and without the authority of law and without any primary liability to the plaintiffs; and (g) the Jetty and the foundation was inherently weak and the damage to the Jetty has no proximate causal connection to the incident involving the plaintiffs' vessel. In the circumstances aforesaid, the plaintiffs are entitled and seek to recover the sum of Rs.16,00,000/- from the defendants which the defendants have unlawfully and malafide, as stated above, recovered from the plaintiffs' Bankers. The plaintiffs are entitled to claim commercial interest from the defendants @ 18% per annum from the date of encashment, that is, 12th September, 1980 till realisation. The plaintiffs seek to recover the said sum in accordance with the particulars annexed hereto as Ex.G. The plaintiffs state that the defendants on 27th October, 1980, adjusted and/or debited a sum of Rs.6,472/- unauthorisedly, purportedly relating to alleged damage to a water barge, from the general Deposit Account maintained by the 3rd plaintiffs as Steamer Agents. Similarly, a sum of Rs.9451-20 was unauthorisedly debited and/or adjusted to the 3rd plaintiff's Deposit Account by the defendants on 18th November, 1980. The defendants have thus unauthorisedly, unlawfully and arbitrarily recovered from the 3rd plaintiffs a sum of Rs.15,923-20 in aggregate, purportedly towards the said alleged damage. For the various reasons as set forth in this plaint, the defendants are not entitled to recover and/or adjust any amount and, therefore, the plaintiffs are entitled to recover from the defendants the said sum of Rs.15,923-20 together with commercial interest @ 18% per annum on Rs.6,472-00 from 27th October, 1980 and on Rs.9,451-20 from 18th November, 1980, both of which till realization.
By a notice dated 18th October, 1980, the plaintiffs recorded all facts and called upon the defendants to comply with the requisitions contained therein and stating therein that the notice was sent as a statutory notice under Section 120 of the Major Port Trusts Act, 1963, as amended in 1974. a copy of the said notice is annexed hereto as Ex.H. A supplementary notice, containing amendments and corrections was also sent on 17th November, 1980. A copy of the said amendment to the notice is annexed hereto as Ex.I. Both the notices were received by the defendants and the defendants, by their reply dated 20th January, 1981, falsely denied the allegations and raised frivolous and untenable contentions. The defendants contend that they were entitled to recover a sum of Rs.28,90,985.35 and claim the balance of Rs.12,90,985.35 after adjustment of Rs.16,00,000/- from the Guarantee amount and further threatened to take proceedings against the plaintiffs for recovery thereof. Copy of the said reply is annexed hereto as Ex.J. In the meanwhile, on 24th October, 1980, i.e., one year after expiry of the period of Limitation, the defendants delivered to the 3rd plaintiff, a Bill dated 22nd October, 1980, claiming an aggregate amount of Rs.28,90,985-35 and after adjusting a sum of Rs.16,00,000/- claimed the balance amount of Rs.12,90,985.35 and alternatively threatened to adjust the amount from the regular Deposit Account maintained by the 3rd plaintiff. Copies of the said Bill and its enclosures are annexed hereto as Ex.K. For the reasons already mentioned herein above, the defendants are not entitled to claim any amount and therefore the demand in the said Bill is not legally enforceable. In any event, the claim in the bill is barred by limitation. The bill does not disclose any particulars and the plaintiffs deny the correctness thereof and in any event, the same is subject to adjudication by this Hon'ble Court. Apparently, on the face of the Bill itself, it is clear that the amount claimed is for dismantling and removing the damaged RCC portion of the Jetty and for reconstruction of the same. Even assuming that the liability is determined, the defendants would at best be entitled to claim cost of repairs and not cost of dismantling and reconstruction. In view of the fact that a reply had been received from the defendants and a bill purported to be for dismantling and removing the damaged RCC portion of the Jetty and for reconstruction of the same was received after the notices sent on behalf of the plaintiffs, by way of abundant caution, the plaintiffs got a fresh notice issued to the defendants dated 26th February, 1981 and the said notice was delivered by hand to the defendants on the same day. A copy of the said notice is annexed hereto as Ex.L. The plaintiffs crave leave of this Hon'ble Court to refer to and rely on the Acknowledgment received from the defendants confirming the receipt of the said letter/notice by hand delivery.
The plaintiffs state that the defendants are of the entitled to retain the sum of Rs.16,00,000/- appropriated from the Bank Guarantee and the sum of Rs.15,923.20 adjusted from the Deposit Account as aforesaid. In the circumstances, it is just necessary and convenient that, pending hearing and final disposal of this suit, the defendants be ordered by a Mandatory injunction to deposit the sum of Rs.16,15,923.20 with a Scheduled Bank, at the first instance for a period of two years and to be renewed from year to year till the expiry of two months after the disposal of this suit, the deposit of the be maintained in the name of the Registrar or such other officer of this Hon'ble Court to the credit of this suit. The plaintiffs state that the defendants have adjusted some amounts from the deposit made by the 3rd plaintiffs. The 3rd plaintiff, as a regular ship-agent, has to, from time to time, make deposits in regard to ship owners other than the plaintiffs 1 and 2 and irreparable loss and injury would be caused to them if the defendants appropriate and aggregate the sum of Rs.12,90,985.35 from such deposits without adjudication of quantum and liability. The plaintiff, therefore, are entitled to an injunction pending hearing and final disposal of this suit, restraining the defendants from appropriating, demanding, recovering or adjusting any amount from the 3rd plaintiffs' account, deposit or otherwise, towards recovery of the said sum of Rs.12,90,985.35 or any part thereof. The balance of convenience is in favour of granting the injunction prayed for above, particularly since the claims, if any, by the defendants is lawfully barred by limitation.
The averments made in the written statement:
The allegations in para 3 are substantially correct. It is true that the first plaintiff is the owner of the vessel "M.V.Lalinda" and the second plaintiff is the Manager and General Agent and the third plaintiff is their Agent in India.
It is also true as alleged in para 4 that the vessel arrived in the Port of Visakhapatnam on the 26th October, 1976 for the purpose of of loading a consignment of Manganese ore. It is also true that the Port of Visakhapatnam is managed and controlled by this defendant under the possession of the Major Port Trusts Act, 1963. It is also true that the third plaintiff represents the interests of the owners of the vessel at Visakhapatnam.
The allegations in para 5 are all not correct. It is no doubt true that it is no doubt true that when a vessel arrives in the Port, before it is berthed, the Pilot of the Port Trust boards the vessel but it is absolutely incorrect to say that the vessel arriving at the Port, is completely under the control and the directions of the Pilot of this defendant. There is no such practice as referred to in the plaint, in the Port of Visakhapatnam for the vessel to be under the control of the Pilot. The said allegation is obviously invented by the plaintiffs to get over the liability for the damage occasioned to the Port property. It is true that on the date of the arrival of the vessel "M.V.Lalinda" in the Port of Visakhapatnam, i.e., 26th October, 1976, Shri B.K.Das, a Pilot under the employment of this defendant, boarded the said vessel, but it is not correct to say that he took control of the vessel from the time he boarded the vessel. It is also not correct to say that the vessel was brought from anchorage to the berth under the control and guidance of the said Pilot. It is respectfully submitted that the Master was always in charge of the vessel. It is no doubt true that the vessel was to be berthed at Q-1 berth, but it is incorrect to say that the vessel "M.V.Lalinda" was moved in the Port area in accordance with and in compliance with the instructions given by the said Pilot. This defendant states that the Master and crew of the vessel failed to carry out the instructions of the Pilot and the accident was entirely due to the negligence of the Master and crew of the vessel. The Pilot gave a report of the accident immediately and subsequently a Court of enquiry was held under Section 358(2) of the Merchant Shipping Act and the findings of the Court of Enquiry were that the accident was entirely due to the negligence of the Master and crew of the vessel "M.V.Lalinda". The report of the Pilot and the statutory enquiry will be referred to and relied on at the trial of the suit. It is respectfully submitted that the findings of the said statutory enquiry and also the statutory enquiry report are binding on the plaintiff and also the Court and the plaintiff cannot contend in view of the enquiry report that the accident was not due to the negligence of the Master or the crew of the vessel "M.V.Lalinda". The plaint is discreetly silent as to how the tug lines broke off and how and whey the ship "M.V.Lalinda" had hit the jetty. The said failure to disclose in the plaint as to how the accident took place, clearly proves that the accident was entirely due to the negligence of the Master and crew of the said vessel "M.V.Lalinda". It is submitted that the hitting of the lay-by- jetty by "M.V.Lalinda" was due to the carelessness and negligence of the Master and crew of the vessel as aforesaid and there is absolutely no truth in the assertion that the instructions of the Pilot were fully carried out and that the accident was due to the negligence of the Pilot. The Master of the vessel was always over all in charge and was responsible not only for safely navigating the vessel but also his responsibility extended to the prevention of any damage or injury either to the Port property or to any other vessel or property in the Port area. As already stated above, it is the Master of the vessel who is the agent and representative of the owner of the vessel who is in full and complete charge of the vessel and also of the safety of its operation, and it is fairly obvious, as stated earlier, that the plaintiff has conveniently invented the theory that the vessel is under the control of the Port Pilot from the time the anchor is lifted till its berth in the Port area and this allegation is made only to suit the plaintiffs' end. This defendant asserts that the Master of the vessel appears to have given an incorrect protest note only with a view to absolve himself and the owners of the vessel from the liability to compensate the Port Trust Board for the losses sustained by it consequent on the said hitting of the jetty by the vessel "M.V.Lalinda". It is true that the Deputy Conservator of this defendant issued a notice on 27th October, 1976 mentioning that the Master of the vessel was responsible for the damage to the jetty and this defendant reiterates that the decision of the Deputy Conservator is absolutely correct and it is also binding on the plaintiffs and the enquiry report cannot be questioned in a Court of law.
The allegations in para 6 are substantially correct. It is true that the Deputy Conservator of the Port Trust by his letter dated 27th October, 1976 demanded the payment of a sum of Rs.16,00,000/- as the provisional estimated damage and it is also true that he demanded that the Master should deposit the said amount and further reserved his right to detain the said vessel until payment thereof. It is true that the third plaintiff by their letter dated 2nd November, 1976 informed the Deputy Conservator that they are to give a Bank Guarantee without prejudice to their legal rights and without accepting their liability for the damage and for the quantum. It is also true that this defendant by their letter dated 5th November, 1976 informed the third plaintiff that they were prepared to accept a Bank Guarantee provided it conforms to the proforma supplied by this defendant. It is also stated that the said Guarantee should be from a local scheduled Bank. This defendant also further requested that there should be an undertaking that the money would be paid i.e., the amount of damage claimed, within seven days from the date of demand.
The allegations in para 7 are all not correct. It is no doubt true that on the day when the demand was made, the amount was not fully quantified, but however, the damage of Rs.16,00,000/- represented a fairly reasonable and approximate amount and, in any event, the damage was likely to be much more and was not likely to be less than Rs.16,00,000/-. It is no doubt true that it was subject to the assessment of the actual damage. But, in any event, the plaintiffs cannot complain about the amount covered by the demand for the obvious reason that when the damage was ultimately assessed it was found to be much larger. It is no doubt true that the defendant in its letter dated 5th November, 1976 mentioned the fact that the damage would be ascertained and it is also true that they informed the plaintiff that after the final assessment the plaintiffs should pay the amount within seven days from the date of such demand. It is true as alleged in para 8 that there was correspondence between the parties and it is also true that the third plaintiff contended that they were not liable to give a Bank Guarantee as demanded by this defendant unconditionally. This defendant submits that the third plaintiff get a notice issued through their lawyer and to it an appropriate reply was sent by this defendant. It is also true that the plaintiffs assorted in the said correspondence that this defendant is not entitled to insist on an unconditional guarantee and further that the plaintiffs' liability would arise only after a decision is given either by a competent Court of law or by an arbitrator or by mutual agreement as to what would be the quantum payable and it is also true that in the course of their reply this defendant asserted that there is no question of adjudication of either the issue of negligence or the question of quantum being determined either by a Court of law or by arbitration. This defendant insisted that as per the possession of the Major Port Trusts Act and also the Regulations, this defendant was entitled to insist on the furnishing of security for any damage to any of its installations or property and that there could be no question of the demand being raised only after the adjudication and further there is also no question of adjudication in the manner referred to by the plaintiffs viz., by arbitration or through a Court of law.
It is true as alleged in para 9 that the plaintiff filed W.P.No.3829/76 under Article 226 of the Constitution of India. But it is incorrect to say that the demand made by this defendant is arbitrary. It is also true that in the said Writ Petition the plaintiffs sought a writ of mandamus directing the vessel to be permitted to sail out of Visakhapatnam and also for a direction that the said permission should be given after execution of the guarantee in the form appended to the Writ Petition by the plaintiffs herein. This defendant contested the said matter and Mr.Justice Raghuveer in W.P.M.P.No.6128/76 dated 25-11-1976 passed an interim order directing that the vessel be permitted to sail on the plaintiffs furnishing a Bank Guarantee for a sum of Rs.16,15,000/- and the learned Judge added certain conditions.
It is true that thereupon, as alleged in para 10, this defendant moved the High Court for an amendment of the order whereby the High Court was pleased to amend the order directing the plaintiffs to give an undertaking that they would give a modified Bank Guarantee, if so directed by the High Court at the time of final disposal of the Writ Petition. It is also true that a guarantee of a conditional nature was executed on 26th November, 1976 and also an undertaking was given to the High Court. It is true that in terms of the guarantee and the undertaking the vessel was allowed to sail on 4th December, 1976.
The allegations in para 11 that subsequently the High Court dismissed the Writ Petition is true. It is respectfully submitted that by a Judgment dated 7th November, 1977, Mr.Justice Jeevan Reddy dismissed the Writ Petition filed by the present plaintiffs and in the course of the order the learned Judge was pleased to clearly uphold the right of this defendant to demand security and the learned Judge also made a specific reference to Section 116 of the Major Port Trusts Act and the Regulation 42 framed by the Port Trust and came to the conclusion that the Port has a right to demand security. It is however true that the Court was pleased to observe that as questions of fact are to be gone into, the plaintiffs have an alternative remedy of a civil suit. The Court was also pleased to observe that there are no grounds to interfere by the High Court under Article 226 of the Constitution of India. By the said Judgment, the High Court was also pleased to direct the plaintiffs to execute a guarantee as per the proforma furnished by this defendant. It is no doubt true that the learned Judge was pleased to observe that any observations made in the said writ Judgment would not affect the rights of the parties.
It is true as alleged in para 12 the plaintiffs preferred a writ appeal to a Division Bench of the High Court of Andhra Pradesh and two learned Judges Mr.Justice Obul Reddy, the learned Chief Justice and Mr.Justice Gangadhara Rao, by a Judgment dated 17th January, 1978 in Writ Appeal No.585/77 dismissed the appeal preferred by the second plaintiff through the third plaintiff and the learned Judges were pleased to observe that the Port is entitled to demand security and further that in terms of Regulation 42 the defendant, Port Trust Board is entitled to impose certain conditions and the Court was also pleased to observe that the reason behind the said Regulations is very obvious because any damage to Port property must be immediately attended to, otherwise it will affect the Port operations and further the learned Judges also upheld the reason behind the furnishing such security, for the vessels that come to Port might belong to foreign companies, which are not Indian Nationals and therefore if no security is given, the problem of recovery after the vessel is allowed to sail, presents major difficulties and in that view upheld the contentions of the defendant. The Court was also pleased to observe that in the circumstances the defendant was entitled to insist on the present plaintiffs to execute a guarantee in terms of the draft given by the defendant. The plaintiffs sought leave to appeal to Supreme Court and the High Court of Andhra Pradesh rejected the oral application by an order dated 28th January, 1978. Therefore it is clear that all the contentions raised by the present plaintiffs in the Writ Petition were negatived. The Court also was pleased to observe that there is no question of compelling this defendant to go to a Court of Law to have the quantum and damage quantified.
It is true as alleged in para 13 that the plaintiffs gave a Bank Guarantee through their Bankers in accordance with the proforma given by this defendant and the same was being extended from time to time.
The allegations in para 14 that the said guarantee on a true and proper construction, amts to a surety bond or indemnity etc., are all not correctly set out. The very object of Bank Guarantee is that the moment a demand is made in terms of the guarantee there should be a compliance with the same and the guarantee is a convenient mode of ensuring payment and a Bank Guarantee cannot be equated to surety ship or to a correct of indemnity. The further contention that the Bank Guarantee is enforceable only if the demand is not questioned by the plaintiffs and it is payable only if there is a primary liability of the plaintiff or it is payable only if the claim is in time and the liability is not otherwise discharged etc., are all baseless, irrelevant and incorrect. The form of the guarantee which is in vogue in the Port Trust Board and which has been executed by the plaintiffs, does not contain any of the conditions that are set out in the plaint nor can the plaintiffs seek to contend that the guarantee is enforceable only if the conditions set out by them in para 14 of the plaint are fulfilled.
This defendant submits that the contentions raised in para 15 are devoid of merit. This defendant has every right and authority to assess the damage and it cannot be said that any assessment by them is either unilateral or arbitrary. The interpretation placed by the plaintiffs on the order of the High Court is not entirely correct and misconceived. What all the High Court had stated is that if any demand is made by the defendant on the plaintiffs, the plaintiffs can certainly question the quantum assessed by this defendant in a Court of law. But it does not mean that the defendant has no right to encash the Bank Guarantee. The plaintiffs' construction or the interpretation placed on the Judgment of the High Court is totally bereft of any substance and ignores the express language of the order and seeks to draw inference which the Judgment of the High Court is not capable of. The High Court only stated that the defendant is entitled to insist on an unconditional Bank Guarantee and plaintiff was bound to execute such a guarantee. The High Court refused to go into the question of negligence for the simple reason apart from that it involves the embarking into an enquiry on complicated facts to High Court who convinced it and the justification to go into the question of negligence. But the High Court never stated that the defendants would proceed to ascertain and assess the quantum and then call upon the plaintiffs to make the payment and that the plaintiff would hen have right to obtain appropriate orders. All that the High Court said was that the guarantee was liable to be encashed but the rider that is added by the High Court is that it will be subject to determination of the damages. There is no restraint or restriction imposed on this defendant to encash the Bank Guarantee and the effect of the observation that it will be subject to the result of the said assuming but not admitting that a suit is maintainable, would only mean that if the plaintiffs challenge the assessment of compensation by the defendant and the compensation assessed by the defendant is ultimately found to be incorrect, then the plaintiffs are entitled to recover the same. But no- where has the High Court stated that the guarantee cannot be encashed till such time a suit is instituted by the plaintiffs and it is decided finally. Further, the appellant Judgment clearly confirms the decision of Mr.Justice Jeevan Reddy in all aspects and in the Judgment of Mr.Jeevan Reddy there are clear observations to the effect that the object of the guarantee in the form required by the defendant was to enable them to encash it whenever they felt it necessary. These observations must be deemed to have been affirmed by the appellate bench and therefore far from imposing a limitation on encashment of the Bank Guarantee only after a suit, the High Court expressly recognized the defendant's right to encash the guarantee without reference to the question of any Court proceedings. Therefore viewed from any angle the interpretation placed by the plaintiffs in para 15 of the High Court's Judgment is erroneous and also misconceived.
It is true as alleged in para 16 that after ascertaining the damage to the tug Souri also this defendant raised a bill on 16th October, 1979 and it is not correct he say that was the only amount assessed and ascertained. Subsequently, there was also an ascertainment of the damage to the Jetty which the plaintiffs themselves have referred to in subsequent paragraphs of the plaint viz., paras 30 and 31 onwards.
This defendant submits that in addition to the damages to the tug Souri the other damages to Jetty etc., was in fact communicated to the plaintiffs. This defendant reiterates that the plaintiffs are liable to compensate the defendants for the damage to 'Souri' as quantified in this defendants' bill dated 16th October, 1979 and this defendant also reiterates that the damage assessed by them is correct and cannot be taken exception to. This defendant also submits that it is true that another bill was raised by them on 14th March, 1979 for a sum of Rs.4,210-75 ps. Towards damage to the tug 'Dolphin' and it is also true that it was debited to the Agent's deposit amount. This defendant submits that the plaintiffs are bound by both the liability and also the quantum.
The allegations in para 17 are totally incorrect. This defendant submits that there is absolutely no question of bar of limitation. The plaintiffs themselves are making a grievance both in High Court no doubt also in the present suit that the damage, if any, is to be quantified and an assessment of the same should be there before any demand is made. The plaintiffs also have admitted that the initial demand of Rs.16,00,000/- is only provisional and therefore from that it is clear that the assessment is to be properly made and only after the quantum is ascertained that the right to sue accrues and till then the defendant cannot recover the actual sum. Therefore right to sue in the matter arises only after the qualification of actual damage and a demand is served and on a refusal to pay.
The allegation that the period of limitation is three years from the date of damage is not admitted and is hereby denied. The further contention that the demand has not been ascertained or assessed within three years is also not correct. In any view the plaintiff has moved the High Court and the Judgment of the Division Bench was only pronounced on the 7th January, 1978. Thereafter the special leave was rejected also in January, 1978 and within that time, in any event, there is no question of any proceedings being taken. This defendant further submits that they are under no obligation to institute any suit to recover their money and they have got a right to recourse to the encashment of Bank Guarantee and in that view once a guarantee is executed this defendant is under no legal obligation to file a suit to recover the amount. This defendant also submits that they have also got a right to proceed against the deposit account of the third plaintiff, who is the agent of the owners, and therefore, there is absolutely no need for them to file a suit. In that view, without admitting that this defendant should demand and sue for recovery of the amount within three years, this defendant submits that when a right to recover an amount against any amount is available this defendant is entitled to encash it at any time for recovery of any debt, it being a special mode of recovery available in pursuance of contract or law and therefore there is no question of initiating any legal action within three years. The repetition that the plaintiffs are not at all liable and that no demand is made except the demand for the damages to the tugs and that such a demand should have been made or should be made within three years from the date of damage are all legally devoid of any merit. The further contention that the plaintiffs are under no obligation to pay any damages whatsoever is factually incorrect. The allegation that the claim is barred by time is needlessly repeated. The contention that beyond three years from the date of accident this defendant has no right or cause of action or claim against the plaintiffs is also bereft of substance. There is no question of extinguishments of liability or discharge of liability on the ground of limitation. As already submitted, the defendant's right is a right to enforce a guarantee which was given in terms of Regulation 42 at the time of the damage to the vessel and before it was allowed to set sail and the guarantee was being extended from time to time and the High Court's observations are also to the effect that the defendant is entitled to encash the guarantee and in that view there is no question of limitation. It is also pertinent that the High Court was also pleased to observe that the assessment of damage is subject to any suit that the plaintiffs might bring. It is therefore obvious from the foregoing that there is absolutely no question of any limitation.
The allegations in para 18 are not only repetition but are also argumentative and the plaintiffs' contention that the right to recover the money under the guarantee would arise only if there is a primary liability and if the damages are properly ascertained and are legally enforceable etc., are all incorrect, untenable and proceed from an erroneous assertion that it is a conditional guarantee. The guarantee in its terms is absolute and unconditional and on a demand being made without any demur and contest the Bank is bound to pay and in the instant matter after qualification of the damage this defendant invoked the guarantee, demanded payment by the Bank and the Bank had in turn complied with the said demand. The assertion that the guarantee is only an indemnity is against needlessly repeated. This defendant submits that the guarantee is a substitute mode of performance, where payment is due. Therefore the plaintiffs cannot contend that it is only an indemnity. The allegation that the defendant's right to recover the amount under the guarantee would not arise till the damages are ascertained and liquidated etc., is not correct. In any view in the instant matter it is only after the damage was assessed that the amount was demanded from the Bank, which complied with the same in terms of the guarantee. As already submitted, the plaintiffs by repeating the contention that the liability under the guarantee is extinguished and that because there is no ascertainment of amount the amount cannot be paid are all needlessly repeated. In the circumstances the encashment of Bank Guarantee is certainly valid and proper and is quite lawful and there is no question of any unauthorized gain. The allegation that all the claims of this defendant stood discharged from 26th October, 1979 is legally incorrect and that therefore no amount is payable under the said guarantee is also devoid of any merit.
The allegation in para 19 that the plaintiffs were obliged to extend the Bank Guarantee from time to time on account of the fear of being involved for contempt of the High Court and in reverence to the orders of the High Court only they extended the guarantee from time to time is not correct. It is submitted that the plaintiffs themselves even before going to a Court were prepared to give a Bank Guarantee and only they insisted on giving a guarantee according to their form only and in view of their contention that any assessment of damage is subject to the result of the suit to be instituted by them in the event of their being aggrieved with the determination of compensation by this defendant, they are bound to give a guarantee in order to allow their vessel to sail from the Port at Visakhapatnam and therefore the extension of guarantee by them is only not on account of fear of contempt but in compliance with the Regulation 42 and the demand by this defendant in order to enable them to take the vessel out of the Port of Visakhapatnam but it can, by no stretch of imagination, be said to be to avoid proceedings for contempt of Court. Again, the plaintiffs have unnecessarily repeated that if the primary liability is discharged then there is no right to enforce recovery and that it is barred by time etc. Having extended the guarantee the plaintiffs cannot raise the bar of limitation and certainly the extension of the guarantee is an acknowledgment of liability and in any view as there is no question of limitation, the plaintiff cannot seek to rely on the passage of time of three years for contending that the right to invoke the guarantee is lost. This defendant reiterates that there is no substance in the assertion that the extension of guarantee is only to comply with the undertaking given to the High Court.
The allegation in para 20 are absolutely false. The invocation of the guarantee, has consequently the sanction of law and is not at all unilateral and arbitrary and not surreptitious as alleged by the plaintiffs, but on the other hand, a letter was addressed to the Bankers and inasmuch as Bankers were aware of their legal obligation they paid the amount covered by the guarantee. In the circumstances there is absolutely not a vestige of truth in the allegations made in para 20.
As alleged in para 21 the plaintiffs have no manner of right to demand the recovery of the amount of Rs.16,00,000/- and much less with interest at 18%. The plaintiffs' claim in this behalf is totally misconceived. There is absolutely no question of any malafides or the recovery being unlawful. If really the plaintiffs' grievance is that the payment is illegal, they should have impleaded Bank also as a party to the proceedings. This defendant is legally entitled to the amount and therefore they are under no obligation to refund the amount. There is absolutely no question of unlawful conversion of any guarantee of the plaintiffs. The retention, it is submitted, is valid and proper.
The allegations in para 22 are equally untenable. This defendant submits that the damage was directly the result of the negligence on the part of the Master and crew of the vessel, who are agent and employees of the plaintiffs, and as such for their negligence the plaintiffs are vicariously liable. The accident was on account of the acts and omissions of the plaintiffs and in fact on account of their positive negligent conduct and the contention that the plaintiffs had no control over the result of the act is also legally devoid of merit. The employees being the agents of the plaintiffs and as a Master and servant relationship subsists the plaintiffs are bound by all consequences of the acts and omissions of their employees.
The allegations in para 23 are equally incorrect. The plaintiffs are over looking the fact that the quantum of damage was ascertained and in fact the same is communicated to them also. Therefore thee is no truth in the assertion that the quantum of damage has not been ascertained. The plaintiffs are bound by the assessment of quantum and also are bound to honour their liability.
The allegations in para 24 that the plaintiffs have no manner of opportunity to ascertain or assess the damages etc., are also not correct. While it is true that the Jetty and installations are under the control of this defendant, still the defendant never objected to the plaintiffs finding out the extent of damage and the quantum of loss. In fact, as mentioned in para 25, they deputed one person by name Sri D.Hariharan and all reasonable facilities were extended to him. In so far as a copy of the report, which is said to have been appended to the plaint, is concerned this defendant submits that they have been served with a copy along with the plaintiffs' lawyers notice and the report is partial, one-sided and the allegations made therein that the officials of this defendant non-cooperated and that there was suppression of records by them are all not correct. The conclusion in the report of Sri Hariharan that the Jetty was inheritely unsound is absolutely without any basis whatsoever. It is submitted that the Jetty was constructed in the year 1973 and the job was entrusted to reputed contractors and the work was satisfactorily completed and it was fully certified as a safe and sound installation by the authorities concerned. The theory that the original structure was founded on an unsound pile work etc., are all invented for the purpose of the report to avoid liability. Even otherwise, if the damage was due to the accident resulting from the plaintiffs' carelessness, they cannot avoid the consequence of such damage. In any event, the contents of the report of the investigation are hereby denied by this defendant and they are not valid or binding on this defendant.
The allegations in para 26 are equally untenable. There is absolutely no statutory provision to make the Court as the authority to assess the compensation. At best, the Court can only decide whether the quantum is correct or not. But the Court cannot by itself function as a Court of enquiry to assess the damages. This defendant also submits that it is absolutely false to say that the property was sufficiently damaged even before the accident and that it was badly constructed etc. There is no question of depreciation as the Jetty itself was constructed in 1973 and it was barely three years old on the date of the accident. The allegation that the Jetty was of no value and that as a result of the accident only there was an exposure of the substantial and actual damage already there is not at all correct. This defendant denies as false that the Jetty was in a dilapidated condition and that it would have collapsed in the ordinary course even without the said collision. The very fact that no such allegation was made in the prior correspondence clearly proves that it is an after thought invented by the plaintiffs to get over their liability. The further allegation that the inherient defects in the construction and the existing damage of the Jetty could be spelt out from the suppression of the records etc., is result of fertile imagination on the part of the plaintiffs, for one thing this defendant asserts that there is no suppression of any material record, secondly this defendant denies as false that the Jetty was damaged badly even before the accident or that the construction was unsound or substandard. The allegation that there was suppression and according to materials and as a result thereof, this defendant is estopped from claiming any damages is untenable. This defendant submits even in the reply notice issued by them they had clearly brought out that the part of the Jetty which was not damaged in the accident was in a sound condition and from that any Engineer could certify that the construction is sound.
The allegations in para 27 are again a needlessly repetition of what is contained in the earlier paragraphs and to avoid repetition they are not being traversed again and each one of contentions is hereby denied. This defendant reiterates that the plaintiff is solely, primarily and entirely responsible for the damage and the claim of this defendant is valid and tenable and they are entitled to recover the full cost of such damage. The contention that in any event the quantum can only be paltry is also incorrect and without any data or basis.
The allegation in para 28 that the plaintiffs are entitled to refund of Rs.16,00,000/- together with interest at 18 per cent per annum is untenable. The particulars given in Ex.G. are incorrect. The allegations in para 29 are also not correct. The recovery of Rs.6,472/- on 27th October, 1980 and the debiting of the said amount to the deposit account of the third plaintiff is in order. Equally in order is the recovery and adjustment of Rs.9,451-20 recovered by means of a letter dated 18th November, 1980. There is nothing illegal, arbitrary or unlawful about the said recovery and the defendant is entitled to the same and the plaintiff cannot seek a recovery of the aggregated amount of Rs.15,923-20 ps., much less with interest on both the amounts at the rate mentioned in the plaint and from the dates given in the plaint. In any event, the claim for interest is legally untenable.
It is true that a notice dated 18th October, 1980 was issued and to it an appropriate reply was sent. It is also true that subsequently another notice was issued and in any view the final notice was given 26-2-1981 and it is true that to the earlier notice this defendant sent a reply. This defendant submits that the contentions raised by them and the stand taken by them in their reply notice defendant 20th January, 1981 are all correct and they are reiterated. It is true that inasmuch as after final ascertainment of damages, which was quantified at Rs.28,90,985-35 after adjusting Rs.16,00,000/- recovered by encashing the Bank Guarantee, the balance of Rs.12,90,985-35 was sought from the plaintiffs.
The allegation in para 31 that this defendant served on the 3rd plaintiff a bill for Rs.28,90,985-35 is true and it is also true that they sought payment of the balance and also stated that they would be adjusting the sum from the deposit account. This defendant reiterates that the demand is quite legal and there is absolutely no question of any bar of limitation. This defendant submits that they are under no obligation to give the details or the particulars as to how the amount is ascertained. This defendant further submits that it is not entirely correct to say that the same is subject to adjudication of the amount by the Court. This defendant submits that in view of the fact that on account of the damage, a portion of the Jetty has become unserviceable, the defendant had to dismantle and remove the same and reconstruct it and as the said damage is the direct, proximate and casual result of the collision, the plaintiff is bound to meet the cost of the said construction. The allegation that the defendant would only be entitled to the cost of repairs and not the cost of dismantling and reconstruction is not at all correct. The allegation that the plaintiffs got a fresh notice issued to raise this contention is not correct. This defendant has reason to believe that apprehending that the earlier notices were defective the plaintiffs have got another notice issued on 26thFebruary, 1981 and this defendant sent an appropriate reply to the same on 5-5-1981. This defendant submits that the original and the revised notices are both not in accordance with Section 120 of the Major Port Trusts Act and they are defective and in any view the said suit is not validly instituted having regard to the omissions of Section 120 of the Major Port Trusts Act. The allegations in para 32 are incorrect and untenable. There is no question of the plaintiff being granted a mandatory injunction even before the disposal of the suit to demand the deposit of a sum of Rs.16,15,923-20 with a bank and ask for the said deposit to be made for a period of two years and for a renewal thereafter from year to year. Such a claim and relief is totally unknown to Law. Virtually the plaintiff is asking for the deposit of the money even before the suit is decreed and no Court has the power to call upon the defendant to deposit the amount claimed in the suit even before any Judgment is passed. In that view, the relief on the basis of the demand in para 32 is legally untenable being unknown to Law.
The plaintiff is not entitled to any injunction seeking a deposit of money nor are they entitled to any injunction restraining the defendant from making any adjustment of the balance of the amount mentioned in para 32 of the plaint. This defendant submits that the pleadings relating to balance of convenience etc., pro-eminently fall for consideration in the injunction petition and therefore they are not being specifically adverted to, but nevertheless there is no question of any balance of convenience being in favour of the plaintiffs, because the plaintiffs have already paid Court fee on the value in respect of which an injunction is sought.
This defendant submits that the cause of action mentioned in paras 33 and 34 of the plaint are not at all correct. The plaintiffs have absolutely no cause of action for the suit.
This defendant submits that a civil Court has no jurisdiction to go into the question because the assessment of the compensation and the question whether the accident was due to negligence of the plaintiffs' Agents and employees as determined by the plaintiffs is final and is not subject to judicial review. Therefore in view of the findings of the statutory enquiry under Section 358 of the Merchant Shipping Act. The observations made by the High Court in the Writ Appeal or in the original Judgment cannot be said to be a decision on the maintainability of a suit. The High Court only observed that disputed facts cannot be gone into in a Writ Petition and merely because it was said in the Judgment of Hon'ble Mr.Justice Jeevan Reddy that there is an alternative remedy it does not mean that a High Court went into the question of maintainability of any such suit or as the what its scope is. This defendant also submits that the observation of the High Court that the encashment of Bank Guarantee is subject to the result of the suit does not also mean that the High Court on merits decided the question of jurisdiction after contest in relation to the question of jurisdiction. In that view this defendant is certainly entitled to raise the question of jurisdiction.
This defendant also submits that under the provisions of the Specific Relief Act, the plaintiff cannot seek a declaration that no money is payable for the reason that such declarations are only limited to matters mentioned in Section 34 of the Specific Relief Act. This defendant also submits that no Court can grant any injunction that a particular claim is barred and therefore order refund of a payment of money already received. In any view this defendant submits that Law of Limitation bars the suit for recovery of the amount but does not extinguish the liability and if the amount is otherwise received no suit can be filed for declaration that the claim for the amount is barred and therefore as a consequent the amount should be refunded. In that view also the present claim is barred under the provisions of the Specific Relief Act. This defendant also submits that M's.Grindlays Bank is necessary party to the suit. This defendant also submits that the suit is bad for misjoinder of causes of action.
The plaintiffs are not entitled to the reliefs sought in para 37(a) of the plaint and also for the consequential relief sought in para 37 (b) and (c) of the plaint. This defendant also submits that the plaintiffs are not entitled to the relief of permanent injunction sought in para 37(defendant). This defendant further states that the plaintiff is not entitled to seek the relief of appointment of a Commissioner as mentioned in para 37 (e) and also the refund of the amount sought in the said para together with interest. As already submitted above the plaintiffs' relief under para 37 (father) for deposit of the suit amount is totally misconceived and is unknown to Law and as such cannot be granted. This defendant further submits that the plaintiffs are not entitled to a relief by way of injunction sought in para 37 (g). This defendant also submits that no interim orders in respect of reliefs sought in paras 37(defendant), (father) and (g) can be sought in main suit.
8. Issues and Additional Issues framed by the trial Court:
Issues:
1) Whether the defendant assessed and quantified the alleged damages to the Jetty and other installations within the period of limitation from 26-10-1976 and made a demand for payment of the same by the plaintiff within the period of limitation?
2) Whether the alleged damage to the defendant's Jetty and other installations assuming it to be true, is extinguished by efflux of the period of limitation?
3) Whether the Bank Guarantee for Rs.16 lakhs furnished by the plaintiff I is in the nature of an indemnity/surety and cannot be invoked unless the plaintiff failed to comply with a demand by the defendant within 7 days from the receipt of the same?
4) Whether the right of the defendants to recover any amount under the Bank Guarantee would accrue in favour of the defendant only if there is a primary liability by the plaintiffs to the defendant and the quantum of damage is liquidated and ascertained and such quantum would be legally enforceable by way of debt by the plaintiff in due in favour of the defendant?
5) Whether the defendants had any legal authority to enforce the recovery of any amount from the plaintiff and whether there was a debt by the plaintiff in favour of the defendants on the date when the Bank Guarantee was encashed by the defendant?
6) Whether the Bank Guarantee can be invoked by the defendant on after the defendant's claim against the plaintiff has become barred by time?
7) Whether the realization of Rs.16 lakhs by the defendant from the plaintiff's bankers is illegal?
8) Whether the plaintiff are liable for the alleged damage to the Jetty and other installations of the Port arising out of the incident on 26-10-1976 and whether the said damage is the proximate result of any act or omission of the plaintiff or their men, employees or agents?
9) Whether the appropriation or the enforcement of the Bank Guarantee is an unlawful act and an unauthorized deed?
10) Whether the extension of guarantee by the plaintiff in accordance with the undertaking given to the High Court of A.P. operates as extension for the period of limitation?
11) Whether the defendant is entitled to encash the Bank Guarantee without a demand on the plaintiff and or before the plaintiff had failed to pay the amount as per demand of the defendants and whether the defendant is entitled to encash the Bank Guarantee after the period of limitation?
12) Is the defendant entitled to retain the amounts recovered under the Bank Guarantee and recover the deposits of the plaintiff?
13) Are the defendants entitled to claim any amount from the plaintiff by way of damages in the absence of quantum of damage by not having been ascertained?
14) If so, what should be the quantum of damages?
15) Are the defendants entitled to arbitrarily determine the quantum or is the quantum subject to adjudication and if so what amount?
16) Whether the defendants are entitled to recover any portion of the amount from the deposit account of the 34d plaintiff with the defendant?
17) Whether the plaintiff are entitled to a refund of Rs.16 lakhs and Rs.15,92330 ps., with interest as prayed?
18) Whether the plaintiffs are entitled to a declaration prayed for?
19) Whether the plaintiff are entitled to the permanent injunction prayed for?
20) Whether this Court has no jurisdiction to try this suit by virtue of Section 358 of the Merchant Shipping Act as contended by the defendant?
21) Whether the Grindlays Bank is a necessary party to the suit?
22) Whether the suit is bad for misjoinder of causes of action?
23) Whether the person signing the plaint had authority?
24) What relief? Additional Issues:
1) Has the defendant assessed the actual quantum of damages? If so, have the defendant proved the amount claimed by them?
2) Whether the Port Trust had jurisdiction or authority of law either by statute or by virtue of terms of the Bank Guarantee to encash the Bank Guarantee for a claim for damage after the period of limitation is extinguished?
3) Whether the defendant has proved that the damage was caused by the plaintiff's negligence and whether the plaintiff are liable and if so, to what extent
9. Evidence available on record:- Witnesses examined on behalf of the plaintiff:
P.W.1:- M.A.Ananth P.W.2:- Hariharan (Examined by the Commissioner - Advocate as per Order in I.A.No.525/89) Witnesses examined on behalf of defendant:
D.W.1 :- B.K.Das D.W.2:- T. Prakasarao D.W.3:- P.S.S.Sundararao D.W.4 :- M.Satyam D.W.5:- M.D.Ismail D.W.6:- V.Ramachandra Rao Documents marked for plaintiff:
Ex.A.1/5-11-76 :- Letter Annexure-A by defendant to 3rd plaintiff Ex.A.2/26-11-76 :- Bank Guarantee annexure-B by Grindlays Bank Ltd., Madras in favour of defendant.
Ex.A.3/3-12-76 :- Order in W.P.M.P.No.6220/76 by A.P.High Court Ex.A.4/15-11-78 :- Bank Guarantee by Grindlays Bank Ltd., Madras in favour of the defendant.
Ex.A.5/16-10-79 :- Bill by defendant to 3rd plaintiff Ex.A.6/ - :- Statement of Account.
Ex.A.7/18-10-80 :- Suit notice by plaintiff' Advocate to defendant Ex.A.8/17-11-80 :- Suit notice by plaintiff' Advocate to defendant.
Ex.A.9/20-1-81 :- Reply by defendant to plaintiff' Advocate Ex.A.10/22-10-80 :- Bill with annexure i.e., prepared by defendant to 3rd plaintiff.
Ex.A.11/26-2-81 :- O/c. of notice by plaintiff to defendant.
Ex.A.12/27-10-76 :- Letter by defendant to plaintiff Ex.A.13/27-10-76 :- Letter by defendant to plaintiff' Advocate Ex.A.14/12-11-76 :- Letter by defendant to plaintiff.
Ex.A.15/23-11-76 :- Copy of letter by Harbor Master to defendant Ex.A.16/18-11-76 :- Letter by defendant Ex.A.17/25-11-76 :- Copy of order in W.P.No.6128/76.
Ex.A.18/27-11-76 :- Letter by defendant to plaintiff.
Ex.A.19/15-11-77 :- Copy of letter to the defendant.
Ex.A.20/14-11-77 :- Letter by defendant to plaintiff.
Ex.A.21/ 18-11-77 :- Letter by defendant to plaintiff.
Ex.A.22/23-11-77 :- Letter of order from 23-11-77 in 794 in W.A.No.585/77 Ex.A.23/15-12-77 :- Letter by defendant to plaintiff.
Ex.A.24/8-2-73 :- Letter by defendant to plaintiff's Advocate Ex.A.25/13-3-78 :- Letter by defendant to plaintiff.
Ex.A.26/22-3-78 :- Letter by defendant to plaintiff.
Ex.A.27/7-6-78 :- Letter by defendant to plaintiff.
Ex.A.28/7-11-79 :- Letter by defendant to plaintiff.
Ex.A.29/9-11-79 :- Letter by defendant to plaintiff.
Ex.A.30/1-9-80 :- bill issued to plaintiff by defendant.
Ex.A.31/3-10-80 :- Bill issued by the defendant to the plaintiff.
Ex.A.32/22-12-80 :- Letter by defendant to plaintiff.
Ex.A.33/5-5-81 :- Reply notice by defendant to plaintiff' Advocate Ex.A.34/2-11-76 :- Letter by plaintiff No.3 to defendant Ex.A.35/5-11-76 :- Letter by plaintiff No.3 to defendant Ex.A.36/19-11-76 :- Letter by Advocate for plaintiff to defendant.
Ex.A.37/8-11-76 :- Copy of letter by the plaintiff Surveyors to defendant Ex.A.38/13-11-76 :- Copy of the letter by the plaintiff Surveyors to defendant Ex.A.39/1-12-76:- Copy of the Lawyer's notice of the defendant Ex.A.40/17-9-77:- Letter by the defendant to plaintiff Ex.A.41/24-11-77:- Copy of letter by plaintiff.
Ex.A.42/25-11-77:- Copy of letter by plaintiff to defendant Ex.A.43/2-12-77:- Copy of letter by the plaintiff to the defendant Ex.A.44/10-1-78:- Copy of Lawyer's notice Ex.A.45/10-8-78:- Copy of letter by plaintiff for Advocates to defendant Ex.A.46/3-11-79:- Letter of extension of guarantee by Grindlays Bank Ltd.
Ex.A.47/29-9-80:- Letter by the Bank to plaintiffs' Advocate Ex.A.48/26-10-80:- Copy of letter by the plaintiff' Advocates Ex.A.49 :- Power of Attorney (photostat copy) Ex.A.50 :- Power of Attorney of the 2nd plaintiff Ex.A.51 :- Power of Attorney (photostat copy) Ex.A.52/26-10-76:- Letter of the plaintiff to defendant Ex.A.53/8-11-76:- Copy of the letter of the plaintiff to defendant Ex.A.54/19-11-76:- Copy of the letter of the plaintiff to defendant Ex.A.55/21-11-76: Copy of the letter of the plaintiff to defendant Ex.A.56/18-11-76:-Statement of Mr.Cho Hoi Cheun - Master Ex.A.57/18-11-76:- Affidavit by Mr.Wong Chi Shwnug - 3rd Officer in duty Ex.A.58/28-10-76:- Affidavit of Mr.Hu Ching Mar, City Officer Ex.A.59/28-10-76:- Note of Protest by Captain Chum Ex.A.60/27-6-89:- Telex message from Pardi Services Ex.A.61/30-6-89:- Rely to Pardi Services Ex.A.62/10-11-79:- Copy of letter for the plaintiff's Advocates Ex.A.63/3-7-78:- Copy of letter for the plaintiff's Advocates Ex.A.64/3-8-78:- Copy of reply for the defendant to the plaintiff's Advocates Ex.A.65/16-11-78:- Copy of letter by the plaintiff to defendant Ex.A.66/20-2-78:- Copy of letter by the 3rd plaintiff to the defendant Ex.A.67/22-2-78:- Reply letter by the defendant to the 3rd plaintiff Ex.A.68/30-5-78:- Letter by the defendant to the 3rd plaintiff Ex.A.69/23-11-76:- Copy of the W.P.No.3829/76 Ex.A.70/25-11-76:- Copy of the order in W.P.No.6178/76 Ex.A.71/1-12-76:- Copy of affidavit by Ch.V.Sarma Ex.A.72/3-12-76:- Copy of the order in W.P.M.P.No.6220/76 Ex.A.73/7-11-77:- Copy of the order in W.P.No.3829/76 Ex.A.74/18-11-77:- Copy of the grounds of Appeal in W.A.No.585/77 Ex.A.75/17-1-78:- Copy of the order in W.A.No.585/77 Ex.A.76/26-2-81:- Acknowledgment Ex.A.77 :- Sketch of the proof showing the turning basic and the wrings.
Documents marked for defendant:-
Ex.B.1/6-4-78 :- Letter to D.Hariharan Ex.B.1/A :- File relating to tender committee proceedings Ex.B.2 :- File relating to work order together with contract conditions Ex.B.3 :- File relating to final bill receipt Ex.B.4:- Signature of DeputyConservator Ex.B.5/22-6-90:- Telex message Ex.B.6/27-6-90:- Reminded Telex Message Ex.B.7/29-6-90:- Telex message Ex.B.8 :- Telex message to Chogules bros., Bombay Ex.B.9 :- Signature Ex.B.10 :- Statement of the Master recorded by the Enquiry Officer The below documents are marked in P.W.2 depositions by way of Commissioner- Advocate as per orders in I.A.No.525/89) Ex.X.1/27-2-78:- Letter from D.Hariharan to the Dy.Secy, Visakhapatnam Ex.X.2/27-2-78:- Office copy of letter from D.Hariharan to the Deputy Secry, Visakhapatnam.
Ex.X.3/27-2-78:- Office copy of letter from D.Hariharan to the Labour Officer, Visakhapatnam.
Ex.X.4 :- Office copy of letter in favour of D.Hariharan to the Chief engineer, Civil, Visakhapatnam.
Ex.X.5/19-4-78:- Office copy of the letter from D.Hariharan to the Chief Engineer (Civil) Visakhapatnam.
Ex.X.6/19-8-78:- Office copy of the letter from D.Hariharan to the Chief Engineer (Civil) Visakhapatnam.
Ex.X.7/2-11-78:- Office copy of the letter from D.Hariharan to the Chief Engineer (Civil) Visakhapatnam.
Ex.X.8/22-9-80:- Report prepared by D.Hariharan.
P.W.1:- M.A.Ananth P.W.2:- Hariharan (Examined by the Commissioner - Advocate as per Order in I.A.No.525/89) Witnesses examined on behalf of defendant:
D.W.1 :- B.K.Das D.W.2:- T. Prakasarao D.W.3:- P.S.S.Sundararao D.W.4 :- M.Satyam D.W.5:- M.D.Ismail D.W.6:- V.Ramachandra Rao Documents marked for plaintiff:-
Ex.A.1/5-11-76:- Letter Annexure-A by defendant to 3rd plaintiff Ex.A.2/26-11-76 :- Bank Guarantee annexure-B by Grindlays Bank Ltd., Madras in favour of defendant.
Ex.A.3/3-12-76 :- Order in W.P.M.P.No.6220/76 by A.P.High Court Ex.A.4/15-11-78 :- Bank Guarantee by Grindlays Bank Ltd., Madras in favour of the defendant.
Ex.A.5/16-10-79 :- Bill by defendant to 3rd plaintiff Ex.A.6/ - :- Statement of Account.
Ex.A.7/18-10-80 :- Suit notice by plaintiff' Advocate to defendant Ex.A.8/17-11-80 :- Suit notice by plaintiff' Advocate to defendant.
Ex.A.9/20-1-81 :- Reply by defendant to plaintiff' Advocate Ex.A.10/22-10-80 :- Bill with annexure i.e., prepared by defendant to 3rd plaintiff.
Ex.A.11/26-2-81 :- O/c. of notice by plaintiff to defendant.
Ex.A.12/27-10-76 :- Letter by defendant to plaintiff Ex.A.13/27-10-76 :- Letter by defendant to plaintiff' Advocate Ex.A.14/12-11-76 :- Letter by defendant to plaintiff.
Ex.A.15/23-11-76 :- Copy of letter by Harbor Master to defendant Ex.A.16/18-11-76 :- Letter by defendant Ex.A.17/25-11-76 :- Copy of order in W.P.No.6128/76.
Ex.A.18/27-11-76 :- Letter by defendant to plaintiff.
Ex.A.19/15-11-77 :- Copy of letter to the defendant.
Ex.A.20/14-11-77 :- Letter by defendant to plaintiff.
Ex.A.21/ 18-11-77 :- Letter by defendant to plaintiff.
Ex.A.22/23-11-77 :- Letter of order from 23-11-77 in 794 in W.A.No.585/77 Ex.A.23/15-12-77 :- Letter by defendant to plaintiff.
Ex.A.24/8-2-73 :- Letter by defendant to plaintiff's Advocate Ex.A.25/13-3-78 :- Letter by defendant to plaintiff.
Ex.A.26/22-3-78 :- Letter by defendant to plaintiff.
Ex.A.27/7-6-78 :- Letter by defendant to plaintiff.
Ex.A.28/7-11-79 :- Letter by defendant to plaintiff.
Ex.A.29/9-11-79 :- Letter by defendant to plaintiff.
Ex.A.30/1-9-80 :- bill issued to plaintiff by defendant.
Ex.A.31/3-10-80 :- Bill issued by the defendant to the plaintiff.
Ex.A.32/22-12-80 :- Letter by defendant to plaintiff.
Ex.A.33/5-5-81 :- Reply notice by defendant to plaintiff' Advocate Ex.A.34/2-11-76 :- Letter by plaintiff No.3 to defendant Ex.A.35/5-11-76 :- Letter by plaintiff No.3 to defendant Ex.A.36/19-11-76 :- Letter by Advocate for plaintiff to defendant.
Ex.A.37/8-11-76 :- Copy of letter by the plaintiff Surveyors to defendant Ex.A.38/13-11-76 :- Copy of the letter by the plaintiff Surveyors to defendant Ex.A.39/1-12-76:- Copy of the Lawyer's notice of the defendant Ex.A.40/17-9-77:- Letter by the defendant to plaintiff Ex.A.41/24-11-77:- Copy of letter by plaintiff.
Ex.A.42/25-11-77:- Copy of letter by plaintiff to defendant Ex.A.43/2-12-77:- Copy of letter by the plaintiff to the defendant Ex.A.44/10-1-78:- Copy of Lawyer's notice Ex.A.45/10-8-78:- Copy of letter by plaintiff for Advocates to defendant Ex.A.46/3-11-79:- Letter of extension of guarantee by Grindlays Bank Ltd.
Ex.A.47/29-9-80:- Letter by the Bank to plaintiffs' Advocate Ex.A.48/26-10-80:- Copy of letter by the plaintiff' Advocates Ex.A.49 :- Power of Attorney (photostat copy) Ex.A.50 :- Power of Attorney of the 2nd plaintiff Ex.A.51 :- Power of Attorney (photostat copy) Ex.A.52/26-10-76:- Letter of the plaintiff to defendant Ex.A.53/8-11-76:- Copy of the letter of the plaintiff to defendant Ex.A.54/19-11-76:- Copy of the letter of the plaintiff to defendant Ex.A.55/21-11-76: Copy of the letter of the plaintiff to defendant Ex.A.56/18-11-76:-Statement of Mr.Cho Hoi Cheun - Master Ex.A.57/18-11-76:- Affidavit by Mr.Wong Chi Shwnug - 3rd Officer in duty Ex.A.58/28-10-76:- Affidavit of Mr.Hu Ching Mar, City Officer Ex.A.59/28-10-76:- Note of Protest by Captain Chum Ex.A.60/27-6-89:- Telex message from Pardi Services Ex.A.61/30-6-89:- Rely to Pardi Services Ex.A.62/10-11-79:- Copy of letter for the plaintiff's Advocates Ex.A.63/3-7-78:- Copy of letter for the plaintiff's Advocates Ex.A.64/3-8-78:- Copy of reply for the defendant to the plaintiff's Advocates Ex.A.65/16-11-78:- Copy of letter by the plaintiff to defendant Ex.A.66/20-2-78:- Copy of letter by the 3rd plaintiff to the defendant Ex.A.67/22-2-78:- Reply letter by the defendant to the 3rd plaintiff Ex.A.68/30-5-78:- Letter by the defendant to the 3rd plaintiff Ex.A.69/23-11-76:- Copy of the W.P.No.3829/76 Ex.A.70/25-11-76:- Copy of the order in W.P.No.6178/76 Ex.A.71/1-12-76:- Copy of affidavit by Ch.V.Sarma Ex.A.72/3-12-76:- Copy of the order in W.P.M.P.No.6220/76 Ex.A.73/7-11-77:- Copy of the order in W.P.No.3829/76 Ex.A.74/18-11-77:- Copy of the grounds of Appeal in W.A.No.585/77 Ex.A.75/17-1-78:- Copy of the order in W.A.No.585/77 Ex.A.76/26-2-81:- Acknowledgment Ex.A.77 :- Sketch of the proof showing the turning basic and the wrings.
Documents marked for defendant:-
Ex.B.1/6-4-78 :- Letter to D.Hariharan Ex.B.1/A :- File relating to tender committee proceedings Ex.B.2 :- File relating to work order together with contract conditions Ex.B.3 :- File relating to final bill receipt Ex.B.4 :- Signature of DeputyConservator Ex.B.5/22-6-90:- Telex message Ex.B.6/27-6-90:- Reminded Telex Message Ex.B.7/29-6-90:- Telex message Ex.B.8 :- Telex message to Chogules bros., Bombay Ex.B.9 :- Signature Ex.B.10 :- Statement of the Master recorded by the Enquiry Officer The below documents are marked in P.W.2 depositions by way of Commissioner- Advocate as per orders in I.A.No.525/89) Ex.X.1/27-2-78:- Letter from D.Hariharan to the Dy.Secy, Visakhapatnam Ex.X.2/27-2-78:- Office copy of letter from D.Hariharan to the Deputy Secry, Visakhapatnam.
Ex.X.3/27-2-78:- Office copy of letter from D.Hariharan to the Labour Officer, Visakhapatnam.
Ex.X.4 :- Office copy of letter in favour of D.Hariharan to the Chief engineer, Civil, Visakhapatnam.
Ex.X.5/19-4-78:- Office copy of the letter from D.Hariharan to the Chief Engineer (Civil) Visakhapatnam.
Ex.X.6/19-8-78:- Office copy of the letter from D.Hariharan to the Chief Engineer (Civil) Visakhapatnam.
Ex.X.7/2-11-78:- Office copy of the letter from D.Hariharan to the Chief Engineer (Civil) Visakhapatnam.
Ex.X.8/22-9-80:- Report prepared by D.Hariharan.
10. Findings recorded by the trial Court in nutshell:- The learned I-Additional Subordinate Judge, Visakhapatnam, while answering issues 1 to 7, 10 and 11 and additional issue No.2, recorded findings in detail in paras 9 and 10 and recorded a positive finding that the defendant is entitled to encash the Bank Guarantee and such encashment is not barred by limitation and thus issues 1 to 7 were answered in favour of the defendant and as against the plaintiffs. Likewise, issues 10 and 11 also were answered in favour of the defendant and against the plaintiffs and additional issue No.2 also was answered in favour of the defendant and as against the plaintiffs. Though a plea that Grindleys Bank is also a necessary party was taken since no arguments had been advanced, issue No.21 was answered in favour of the plaintiffs and against the defendant. While answering issue No.22 on the misjoinder of causes of action, no material had been placed before the Court and in view of the same, the said issue was decided in favour of the plaintiffs and against the defendant. While answering issue No.23, on the aspect of authority of the plaintiffs to sign the plaint, in view of the fact that third plaintiff gave power of attorney in favour of P.W.1 and Ex.A.49 and Ex.A.51 were marked through P.W.1 and since P.W.1 had power of attorney on behalf of plaintiffs 1 to 3, got filed the suit and gave evidence and it was not suggested how the person had no authority to file the suit, the said issue was decided in favour of the plaintiffs and against the defendant. While answering issue No.20 on the aspect of jurisdiction to try the suit in view of Section 358 of the Merchant Shipping Act, 1958, the trial Court came to the conclusion that the contention of the defendant that in view of Section 358 of the Merchant Shipping Act, 1958, specified supra, the Civil Court has no jurisdiction to try the suit cannot be sustained. While answering issues 8, 13, 14, 15, additional issues 1 and 3, the trial Court commenced the relevant discussion from para 15, proceeded to discuss the decisions, relied on Section 75 of the Harbours, Docks and Piers Clauses Act, 1947, Section 15 of the Pilotage Act and also referred to the relevant provisions of the Indian Ports Act and further discussed the oral and documentary evidence available on record at length, and ultimately came to the conclusion that the incident which had occurred on 26-10-1976 being the proximate result of the omission on the part of the plaintiffs, the defendant is entitled to claim an amount of Rs.28,90,985-35 less Rs.7,81,375-00 and after encashment of Rs.16,00,000/- by the defendant, the defendant is entitled to recover the balance of Rs.5,09,610-35. While answering issue No.9, the trial Court observed the appropriation of the Bank Guarantee by the plaintiffs cannot be said to be unlawful. Likewise, the trial Court also recorded certain findings while answering issue nos.16, 17, 12, 18, 19 and ultimately while answering issue No.24, the trial Court held that the plaintiffs are entitled only for permanent injunction restraining the defendant from collecting Rs.12,90,985-35 as demanded under Ex.A.10 but the defendant is entitled to claim Rs.5,09,610-35 and thus the plaintiffs are liable to pay Rs.5,09,610-35 and thus the suit was partly decreed with proportionate costs granting permanent injunction restraining the defendant from collecting Rs.7,81,375/- out of Rs.12,90,985-35 as demanded under Ex.A.10, but, however, observed that the defendant is at liberty to collect Rs.5,09,610-35 out of Rs.12,90,985-35 from the plaintiffs. Accordingly, the suit was partly decreed and the rest of the reliefs had been negatived. Hence, the present appeal.
11. It is needless to say that the 3rd plaintiff alone had preferred this appeal. Though elaborate pleadings were put in and reasons in detail had been recorded while answering several issues, several of the questions which had been argued in elaboration before the trial Court had been left untouched. In the light of the rival contentions advanced by the Counsel on record, the following points arise for consideration:
1) Whether the 3rd plaintiff being an agent can be fastened with the liability in the facts and circumstances of the case?
2) Whether the liberty given to make deduction to the defendant be maintained in the absence of a counter claim made by the defendant in this regard?
3) Whether the remedy, if any, available to the defendant in this regard is to proceed by way of a separate suit or in the facts and circumstances, the relief granted even in favour of the defendant in the suit filed by the plaintiffs be maintained?
4) If so, to what relief the parties would be entitled to?
12. Points 1 to 3:- For the purpose of convenience, to avoid the overlapping findings, these points had been dealt with together. The respective pleadings of the parties, the evidence available on record and the findings recorded by the trial Court in nutshell already had been specified above. Section 131 of the Major Port Trusts Act, 1963 dealing with alternative remedy by suit reads as hereunder:
Without prejudice to any other action that may be taken under this Act, a Board may recover by suit any rates, damages, expenses, costs, or in the case of sale the balance thereof, when the proceeds of sale are insufficient, or any penalties payable to, or recoverable by, the Board under this Act or under any regulations made in pursuance thereof.
Elaborate submissions were made on this aspect, that in the light of the peculiar facts and circumstances, the question of granting relief in favour of the defendant in the absence of a counter claim would not arise and even if the defendant is entitled such relief, the only remedy is to file another suit. Further elaborate submissions had been made on the aspect that an Agent cannot be made liable at all and the findings recorded by the trial Court are erroneous. Incidentally, certain submissions were made in relation to negligence. On the aspect of negligence, elaborate findings had been recorded by the trial Court.
13. P.W.1 deposed that he was working as Branch Manager, P&I Services since 1970 and his company represents P & I Associations (Protection & Indemnity) Abroad and they represent them and act for them as their correspondents in India and they will have to assist them through their agents for prevention and minimization of their claims of clients. This witness specifically deposed that the 1st plaintiff company is the owner of the ship named Lalinda and the 2nd plaintiff is the operating Managers of the 1st plaintiff and the 3rd plaintiff is the Agents for the 1st plaintiff at Visakhapatnam at the relevant point of time and this witness holds the Power of Attorney on behalf of plaintiffs 1 to 3 with regard to the presentation of the suit. Ex.A.49 is the photostat copy of the Power of Attorney given to him by 1st plaintiff. Ex.A.50 is the Photostat copy of the Power of Attorney given by plaintiff No.2 in his favour. Ex.A.51 is the Photostat copy of the Power of Attorney given by plaintiff No.3 in his favour. This witness also deposed that the vessel arrived to the Port of Visakhapatnam during October, 1976 and it was reported stating that the said ship was involved in an accident on 26th October, 1976 as it was contacted with a dredger lay bye jetty belonging to Visakhapatnam Port Trust. P.W.1 further deposed that the usual practice is that any vessel that reaches the Port has to be stay in high seas and then the Port Trust Pilot will go to that ship and bring the said ship into the harbour and during that process the accident occurred to plaintiff No.1's ship. P.W.1 also deposed that after receiving the said information of accident, he visited Visakhapatnam and met the 3rd plaintiff and also the Master of the ship and also the Port Officials and discussed with regard to the incident to see that the ship should not be detained. P.W.1 also further deposed that on 26th October, 1976 itself the Master of the ship informed the incident through a letter to the Port Trust authorities and he marked a copy to the 3rd plaintiff, which is Ex.A.52. Ex.A.53 and Ex.A.54 were written by the Master of the ship in that connection. Ex.A.55 is another letter dt.21-11-1976 written by the Master of the said ship to the Port Trust authorities in connection of the same. Ex.A.12 is the letter written by the defendant demanding to pay Rs.16 lakhs towards the damages. The 3rd plaintiff wrote a letter to the defendant asking them to accept the Bank Guarantee instead of cash deposit subject to the determination of liabilities and quantum of damages and the Port Trust agreed to receive the Bank Guarantee if the said Bank Guarantee is in their form and in an unconditional one. P.W.1 also deposed that he recorded the statement of the Master and the Duty Officer and Chief Officer of the ship which was duly attested by Notaries with regard to how the accident occurred and in addition to it, the Master of the ship was also recorded a Note of Protest before the Notary and Ex.A.56 is the statement of Master recorded by him which was duly attested by a Notary and Ex.A.57 is the statement of Duty Officer recorded by him and Ex.A.58 is the statement of Chief Officer recorded by him and Ex.A.59 is the Note of Protest recorded by the Master before the Notary. He also deposed that as the Master of the 1st plaintiff, Duty Officer and Chief Officer are not traceable, they sent a telex message to their Principal at London to find out whether the above persons are available through owners of the said ship and Ex.A.60 is the printed telex message send by him to his Principal at London, dt.27-6-89 and he received a reply to it from his Principal on 30th June 1989 stating that there is no possibility of tracing them and Ex.A.61 is the reply sent by the Principal. He also further deposed that after discussion with the Port authorities he came to know that the Port Trust authorities are not going to accept conditional Bank Guarantee and they insisted for unconditional Bank Guarantee and they also told that unless the Bank Guarantee without any condition is given, they would not allow the ship to sail from Visakhapatnam Port. This witness deposed that through their Advocate, he sent notice to the Port Authorities enclosing their form of guarantee and requested the Port authorities to accept the same and allow the ship to sail and when the Port authorities refused to accept the same, they filed Writ Petition in High Court of Andhra Pradesh challenging the demanding of Port Trust authorities to give unconditional Bank Guarantee and also filed I.A. in that Writ Petition asking the High Court to direct the Port Trust authorities to release the vessel on accepting the Bank Guarantee in the form as offered by them and the High Court passed interim orders directing the Port authorities and allow the ship to sail from Visakhapatnam port. This witness further deposed that subsequently, the Port Trust authorities filed an application for modification of the Order and in such petition the High Court passed orders that the plaintiffs have to give undertaking as directed by the High Court in the main Writ Petition and directed the defendant to allow the ship to sail on existing guarantee. This witness also further deposed that the said Writ Petition was dismissed and against the said dismissal, they filed Writ Appeal and the appellate Court passed an interim order to renew the Bank Guarantee and accordingly the plaintiff renewed the Bank Guarantee and the Bank Guarantees are being renewed every year from time to time and the Port Trust authorities writing letters regularly with regard to the said matter. Under Ex.A.25 the defendant asked plaintiffs to renew the Bank Guarantee otherwise they are going to take action against plaintiffs and Ex.A.26 is a similar letter written by the defendant to the 3rd plaintiff. He also deposed that Ex.A.27 is a letter written by the defendant to the plaintiff and in that letter they have mentioned that they are going to move the High Court under Contempt of Court if the Bank Guarantee is not renewed. This witness further deposed that Ex.A.28 is another letter written by the defendant asking to renew the Bank Guarantee and Ex.A.29 is the letter by the defendant dt.9-11-1979 asking for further renewal of the Bank Guarantee for a period of another one year. This witness also deposed that the Bank Guarantees are renewed strictly without any prejudice and Ex.A.46 is the copy of the last renewed guarantee dt.3-11-1979 and the same was forwarded by the 3rd plaintiff with a covering letter to the defendant and Ex.A.62 is the letter dt.10-11-1979 enclosing Bank Guarantee to the defendant and Ex.A.63 is the letter addressed by the plaintiff-Advocate to the defendant dt.3-7-1978 and Ex.A.64 is the Xerox copy of the notice received by the plaintiff through the defendant (subject to objection) and Ex.A.65 is another letter dt.16-11-1978 addressed to the defendant enclosing the Bank Guarantee. This witness further deposed that Ex.A.6 is another letter from 3rd plaintiff to the defendant dt.20- 2-1978 and Ex.A.67 is the letter written by the defendant dt.22-2-1978 to the 3rd plaintiff and Ex.A.68 is the letter dt.30-5-1978 from defendant to 3rd plaintiff. This witness also deposed that Ex.A.69 is the copy of the Writ Petition and Ex.A.70 is the interim order passed in that Writ Petition and Ex.A.71 is the petition filed by the Port Trust for modification of the orders passed in Ex.A.70 and Ex.A.72 is the copy of the order passed by the High Court by modifying the order and Ex.A.73 is the Final copy of orders passed in the Writ Petition. He also further deposed that Ex.A.74 is the grounds of appeal in Writ Appeal and Ex.A.75 is the Final Order passed in the Writ Appeal by the High Court. This witness further deposed that under Ex.A.1 defendant stated that they would accept the Bank Guarantee subject to the condition that the plaintiff would pay the amount in cash within 7 days from the date of demand, and if the plaintiff fails to pay the amount within 7 days of such demand, the defendant is going to encash the Bank Guarantee. He also stated that for the first time the defendant sent a demand by their letter dt.22-10-1980 enclosing the bill for the 1st time demanding the payment of balance bill amount under Ex.A.10 to the tune of Rs.28,90,985-35 ps. and in the said letter they have stated that they have already adjusted Rs.16 lakhs from Bank Guarantee and asked the plaintiffs to pay the balance amount. This witness also further deposed that in addition to it, the defendant claimed a sum of Rupees six thousand and odd by a bill dt.1-9-1980 towards damages caused to water barge which is under Ex.A.30 and by another bill dated 3-10-1980 the defendant claimed Rupees nine thousand four hundred and odd under Ex.A.31 towards buoy and the defendant debited the said amounts from the deposit of the 3rd plaintiff subsequently. P.W.1 also deposed that they have appointed an Engineer of Indian Institute of Technology at Madras by name Mr.Hariharan to investigate and assess the damages and the said person gave a report after investigating. P.W.1 also deposed that they have filed this suit for refund of the amount which was encashed by the defendant from the Bank Guarantee and the two amounts debited as the same was done after 3 years of incident and without intimating or demanding the said amount prior to it. P.W.1 also further deposed that neither the 1st plaintiff nor the 2nd or 3rd plaintiff accept the liability to pay the any amount. He also deposed that Ex.A.11 was delivered on the defendant by hand delivery obtaining Acknowledgement to it and Ex.A.76 is the acknowledgement. He also further deposed that on the same day they sent a copy of Ex.A.11 through registered post to the defendant. He also deposed that the liability with regard to the quantum of damages of the plaintiffs was not fixed by any competent authority. In the cross-examination this witness deposed that within few days after the said accident, he came to Visakhapatnam. He also deposed that during the first week of December, 1976 the vessel sailed from Visakhapatnam and by the time he came to Visakhapatnam, the Master of the said vessel gave Ex.A.52 to the Port authorities. He also deposed in his cross-examination that as per the practice the Master of the vessel should maintain log book and he also obtained log extract from the Master of the said vessel apart from the other movement record of the said vessel. He also deposed that it is incumbent on the Master to maintain the movement register apart from the log book. He also further deposed that the movement book is different from log book and there is a separate book as movement register and the Duty Officer has to maintain the said Movement Register and the master of the Chief Master has to maintain the log book and he is not in possession of the original of ship movement book of ship Lalinda. He also deposed that he has no personal knowledge as to how the said accident was occurred. He also further deposed in his cross-examination that without seeking record, he cannot say the name of the Master of the said vessel but it is Chinese name and Ex.A.61 does not say the Master of the vessel is in service or not. He also deposed in his cross-examination that it is not true to say that he did not take any steps to get the Master or the Chief Officer of the said vessel to depose and he is wantonly withholding the examination of the said witnesses to gain wrongfully. He also deposed that he is not aware whether the vessel Lalinda is touching in Indian shores and he is also not aware whether the Lloyads list publish the movement and whereabouts of the vessels in the various seas throughout the world. He further deposed that he received a message of accident by way of telex message and also telephone from the agent of Visakhapatnam. He also further deposed that he did not remember whether the said telex message is available in their office or not. He also further deposed in his cross-examination that it is a statutory requirement that the Pilot of Port should go to vessel if the vessel touches any Port and the said pilot has to bring the said vessel into the harbour. He also deposed that it is not true to say that the master of the vessel is to be complete in charge of taking the vessel into the harbour. He also deposed that he did not know whether the record is available to show that he himself recorded the statements of the Master, Duty Officer and the Chief Officer of the vessel in the presence of Notary. He further deposed that he always prepared draft and got it faired and the statements of the above Officers were typed at the Office of the Notary. He also further deposed in his cross- examination that Ex.A.56, Ex.A.57 and Ex.A.58 do not contain initials or anything indicating that they were typed after seeing a draft and Ex.A.56 and Ex.A.57 are the cyclostyle copies. He also deposed that it is not true to say that Ex.A.56 and Ex.A.57 were taken to the Notary after they were cyclostyled. He also deposed in his cross-examination that the reasons for not recording the statements immediately after the accident are 1) the ship was undergoing repairs and 2) it was very difficult to board the said vessel due to bad weather and to interrogate the master and other members of the crew. The log book contains the weather, the rain and other things. He also deposed that he is not maintaining diary with regard to the movements whenever the accident is occurred. He also deposed that it is not true to say that all the statements recorded from the master and other officers are self-serving statements to avoid liability. He also deposed that it is not true to say that the other letters, protest notes sent to the defendants by the plaintiffs are only self-serving and to avoid liability.
14. P.W.2 - Mr.Hariharan deposed that he was a B.Sc., B.E., from Mysore University and holds Master of Building Science from University of Sydney, Austral and now working as Chief Techno-Economic Officer (C.T.E.O.) in the Department of Civil Engineering in I.I.T., Madras and he passed out in 1953. Till 1969 he worked as Resident Engineer of Common India Ltd., firm of Engineers and Contractors Specialising in Bridges, Jetty's Chimney's and Heavy Industrial Structures. He also deposed that after Common India's assignment, he did his Master of Building Science in Australia and then joined I.I.T., Madras. He further deposed that on 31-1-1978 M/s.P&T Services approached him to monitor the work involved in the reconstruction of the Jetty after assessing the extent of damage, if any, and to determine whether and how the expenditure involved is minimal or what? and in this connection he visited Visakhapatnam and beginning from February, 1978, he visited quite a few times and the last time was on September, 1978. He also deposed that he contacted the Officers of defendant and he visited the accident site and the portion of the Jetty at the bay that has been demolished and the length of the Jetty remaining over was about 300 feet and the Jetty was standing in three Sections linked with pre-casti connections. He further deposed that he examined the site and in order to ascertain the damages, he enquired the defendant's authorities various dates like soil investigation report, Report on the settlement characteristics of the pre-cast Piles and design data and they were not made available and details were not made available in the beginning. He further deposed that after his third visit to Visakhapatnam in April, the notice inviting tender for repairing the damaged Jetty was made available but the data was not available. P.W.2 also deposed that he had written to both Administrative and Engineering Officials of defendant and he addressed a letter to the Secretary, V.P.T., dt.27-2-1978 - Ex.X.1 and marking of this document is objected and the document is admitted in evidence subject to the objection. He also further deposed that on the same day he addressed letters to the Deputy Secretary, V.P.T. and the Law Officer V.P.T., Ex.X.2 and Ex.X.3 (marked similar to Ex.X.1). Ex.X.1 to Ex.X.3 were addressed from I.I.T., Madras and sent by post. He also deposed that since the defendants officials permitted to take notes of designed data, soil analysis data and details of tenders received, he asked in Ex.X.1 to Ex.X.3 for permission to take Photostat copies of those documents to save time and except the notice inviting tender and the original quotation of AFCONS, no other documents were made available to him by the defendants' officials. P.W.2 also further deposed that he wrote on 22-3-1978 to the Chief Engineer, Civil, V.P.T., drawing his attention to his letter dt.11-3-1978 which was given personally in his office asking for the details of the proposed work on the Jetty and the said letter dt.22-3-1978 is Ex.X.4 and there was no response to Ex.X.4. He further deposed that on 19-4-1978 he again wrote a letter to the Chief Engineer, Civil, V.P.T., Ex.X.5. He further deposed that in April, 1978 when he visited Visakhapatnam from 16th to 21st, he was given to understand that no fresh borings had been taken and the data marked on drawing V.H.-219 A-69 the basis not was available. He also deposed that four specific requests were made in Ex.X.5 and he served Ex.X.5 personally to the Chief Engineer, Civil, V.P.T. and a copy of Ex.X.5 was given to the Executive Engineer (Designs) U.T.P. (Marking of Ex.X.5 was objected on the ground that the original of Ex.X.5 was not received by the addressee). He further deposed that he was told that the data originally used for the original construction of the Jetty has been adapted from the present design also. P.W.2 also deposed that he did not receive any response from the addressee of Ex.X.5 in pursuance of Ex.X.5. He further deposed that he addressed two more letters dated 19-8-1978 and 2-11-1978 to the Chief Engineer, Civil, V.P.T. (Counsel for the defendant objected admission of these documents and marked subject to the objection of defendant's Counsel). Letters dt.19-8-1978 and 2-11-1978 marked as Ex.X.6 and Ex.X.7 were sent by post from I.I.T., Madras. He also further deposed that he prepared a report pertaining to the monitoring of the repair work of the Jetty and the said report is Ex.X.8 and he mentioned in Ex.X.8 that the soil analysis data was not furnished to him by the defendant and boring details were also not made available to him by the defendant and he mentioned the said fact in Ex.X.8. P.W.2 deposed that soil analysis data is important because the Jetty is made to rest on load bearing piles and without the information on the nature of the soil on which the pile will be made to rest, it's depth cannot be predetermined. He also deposed that the defendant provided the cut off levels of the piles of the original Jetty, but the more important information of penetration of the piles during its final driving was not provided by the defendant's officials and the said information must be available in the log books but they were not made available. He deposed that he was told by the Engineers of the VPT that a decision to strengthen the second bay of the Jetty by providing a 6 inches thick deck-slab has been taken but they have not decided this 6" thickness as final. P.W.2 also deposed that he asked for the basis of the design and it was not made available and no design data was made available at any point of time for the pre-cast piles and he had seen the drawings at the work spot. He deposed that in fact during his subsequent visit, the strengthening of the second bay was being done by providing four inches thick decking and when asked on what basis this thickness has been decided upon, no details were made available by V.P.T. He also deposed that if no test has been made to ascertain the existing strength of the structure without which the subsequent action of strengthening is questionable. He also further deposed that two aspects of the work is inconsistent and one is the award of the work and the second thing is in non- compliance of the relevant Indian Standard Specifications and Code of Practice. He also deposed that in the award of work by V.P.T. only two parties tendered at their prices, one was ONYX Engineers and the second one was AFCONS. P.W.2 deposed that according to the VPT they had assured that in tender from AFCONS was 16% above the estimate done by VPT and the time given for tendering for such a work was apparently small and this could be the reason why firms like H.C.C., Common India, Simplex etc., did not tender their prices. So the VPT should have gone for re-tendering as this is the standard practice and instead of this, the VPT negotiated with AFCONS and also reduced the construction time from 9 months in the Notice Inviting Tender (NIT) to 6 months while awarding the work to AFCONS. He deposed that Indian Standard Specifications makes it mandatory to have Soil Analysis data and at the time of construction of original Jetty, this Code of Practice by the Bureau of Indian Standards did not exist. He also deposed that in Ex.X.8 he referred to I.S.4651-Part I-1974 (refer to page No.7 of Ex.X.8). He deposed that from the work order he came to know that the work should be completed within six months from the date of commencement of work but whereas the work was going on even in the month of September, 1978 and the work was commenced even prior to his 1st visit i.e., February. He also further deposed that if the work period is reduced from 9 months to 6 months higher price will naturally result, in other words, the work went on beyond 6 months. He also deposed that from the results Notice Inviting Tender, only two parties tendered to the work and Hindustan Construction Company are specialists for this nature of work apart from Common India, Simplex Piles Ltd., etc. P.W.2 deposed that in his opinion the VPT have very capable Engineers, men, materials and machinery to do this type of work. P.W.2 further deposed that items 1, 2 and 3 of the estimate like extraction of damaged piles in Ex.A.10 have not been done and if these irrelevant items are not taken into consideration, the value of work will get reduced to Rs.9,27,340/- P.W.2 also further deposed that the total value of these 3 items i.e., item 1 to 3 in Ex.A.10 is Rs.5,97,071/- and according to the original estimate of the VPT, the total amount is Rs.15,08,727/- and after deduction of Rs.5,97,071/-, the net amount of VPT estimate is Rs.9,27,340/-. P.W.2 also deposed that when reconstruction of any work is undertaken where Piles are damaged or suspected to be damaged, the Standard Engineering Practice to provide new Piles in the spaces between the original Piles for two reasons - one is not to disturb the soil from its conditions based on which the design is made because invariably the removal of damaged or suspected to be damaged Piles will result in the disturbance of the soil and secondly the economics of cost of the recovery (extraction) of the Piles and the cost recovered thereof do not justify the extraction; moreover the recovered Piles being suspect will never be permitted to be incorporated in new work. P.W.2 also deposed that except for a portion of items No.1 and 2 of estimate amounting to Rs.15,748-50, the balance quantity of work totaling to Rs.5,97,071/- was not required to be done and it was never done (Rs.15,748-50 is not included in Rs.5,97,071/-). He also deposed that the VPT has not followed the Indian Standard Specifications i.e., (1) In the investigation of the soil before the design could be made, (2) The Indian Standard Specifications for the method of measurement for the building and Civil Engineering Works - Part XXIII dealing with Piling works. (I.S.1200 - Part XXIII - 1977) Clauses 2.6 and 2.11 - Refer; Item 2 of AFCONS Quotation demands a payment for setting up Piling Rig at each Pile location at Rs.1,000/- for each Pile. Item 2.11 of the Code cited above lays down "Shifting Plant at the site of work shall be included in the item of Piles". (Imperative verb shall is to be noted). P.W.2 further deposed that the savings in cost in payment for setting of Piling Rig at each Pile location if not paid separately the Port Trust would have saved Rs.62,000/- in the payment made to AFCONS. He also deposed that the Piling systems offered by AFCONS is a Cast-in-Situ, R.C. bored Pile. He also further deposed that I.S.1200-1977 does not make any reference to the payment of empty boring for this class of Piles and empty boring is relevant only to Cash-in-Situ drivers concrete Piles, hence this payment for empty boring amounting to Rs.25,567-50 could have been avoided by VPT. He further deposed that AFCONS used Bentonite slurry for the first two or three Piles and thereafter, the contractors stopped using Bentonite slurry and provided steel-liners. He also deposed that had Bentovite Slurry was use the payment for liners could have been avoided and Rs.2,18,018-23 could have been reduced to a very small amount. P.W.2 also further deposed that the defendant did not make available the basis on which the strength in the existing structure was assessed and on what basis the strengthening both in quantum and nature were decided but this has been executed. In the cross-examination this witness deposed that it is true that he was contacted by P.W.1 for utilization of his services with regard to monitoring of repair work of Jetty and he had not given any other report of this large sum and his other colleagues were also consultants for other work. He also deposed that it is not true to suggest that the general practice in cases of this nature should be that the Head of the Institution should be asked to spare the services of their employees but in I.I.T., the staff are allowed to have their field of work developed and the approval of the Director is necessary for undertaking for consultancy. He also deposed that they had regular norms for payment for the consultancies by parties. He further deposed that the payment by the party directly to the IIT, the norms of IIT permit the sharing of remuneration by other staff even if they do not take part in the said consultancy. He also deposed that the amount of consultancy will be decided by the concerned staff member taking into consideration the nature of the work and the time involved, and the fixation of remuneration for consultancy is pre-appraisal. He further deposed that usually there will be a discussion between the prospective client and the concerned faculty member for pre-assessing the consultancy charges and the discussions will be recorded. He also deposed that it is not necessary always to have a letter from the party with regard to nature of consultancy, volume of work etc. He also deposed that he wrote a letter to the Director, IIT, seeking permission by mentioning the nature of work for obtaining permission to proceed with the work sought by party and after the discussions, there was a letter from P & I Services to the Director, I.I.T., to spare his services for this work. P.W.2 in his cross-examination further deposed that he did not think it necessary to visit the site for assessing the quantum of work and there was nothing in writing either from P & I services or from the Director, I.I.T., with regard to the scope of the work. Witness adds the scope of the work is specified by him and Director, I.I.T.'s approval was obtained. He also deposed that this record would be available with I.I.T., Madras. He deposed that he had not submitted any interim reports but he had submitted only a final report to the Director, I.I.T., Madras. He further deposed that apart from I.I.T., in 1978 there are more Engineering Institutions in Madras. Witness adds but not of I.I.T. caliber and standard. Quite a few consultancy services consisting of retired Engineers and Professors are available for doing consultancy works. P.W.2 also deposed that P.W.1 contacted him on behalf of P&I Services with regard to the present consultancy work. He also deposed that there was no enlargement of the scope of his assignment after the initial fixation of the scope of the work. He also deposed that monitoring of work means observance of the practices, the essentialities of the work and the way the work is carried out in all its engineering aspects. He further deposed that it is not the observance of day to day work but appreciation of time over all concept, design and execution of work. He also deposed that what he meant in his report at page 6 that the scope of the work is enlarged is that the VPT has not provided the information that is necessary and had the necessary information was provided by VPT there would not have been so much trouble in digging the factual aspects. He also further deposed that he asked the P&I services what is the technical information that is available for doing the work and they have replied that all the technical information is available with VPT and this was prior to his commencement of the work and the request for technical information to proceed with work from P&I Services is in writing. Ex.X.1, Ex.X.2 and Ex.X.3 were sent on his letter-heads and sent by IIT and postage was borne by IIT, Madras and IIT, Madras maintains dispatch register. He further deposed that in Ex.X.1 to Ex.X.3 he did not think it necessary to have a headnote 'Subject' before the body of the letter as he met them for the first time. P.W.2 further deposed that except his saying about the dispatch of Ex.X.1 to Ex.X.3, there is no written proof except dispatch register maintained by IIT, Madras. He also deposed that some more correspondence was there with VPT apart from Ex.X.1 to Ex.X.7. Ex.X.1 to Ex.X.3 were not referred to in Ex.P.8 report. Ex.X.4, Ex.X.5, Ex.X.6 and Ex.X.7 show that they are also marked to P&I services. P.W.2 deposed that it is true Ex.X.1 to Ex.X.3 do not contain such marking of copies to P&I Services. Witness adds better correspondence marked to P&I Services so that result can be yielded as P&I Services would pursue the matter. He also deposed that he met P.S.Row as Law Officer since there is a board outside his room showing "P.S.Row, Law Officer. He also deposed that he do not know if the said P.S.Row was only an Assistant Law Officer at that time. P.W.2 deposed that it is not true to suggest that VPT has not received Ex.X.1 to Ex.X.3 as they were never addressed by him. He deposed that he had not received original of the letter shown to him as reply to Ex.X.4. The letter shown by defendant's Counsel is marked as Ex.B.1 (marked only for the purpose of identification only). Ex.B.1 is letter dt.6-4-1978. P.W.2 deposed that it is not true to suggest that all the records were made available to him by VPT., but some records to wit, drawings were made available to him. P.W.2 deposed that it is true to suggest that he made notes from the records made available to him but not from the records available with VPT. He also deposed that except the more of work drawing of AFCONS, no other detail drawings were made available. P.W.2 deposed that it is not true to say that salient design of the work was made available to him. He deposed that his letter Ex.X.5 shows that the details of some of the records were perused by him. He also deposed that it is true that there is a reference to the drawing in Ex.X.5 that drawing of soil test was shown to him. He also deposed that that drawing shows details of soil test for previous work at the time of construction of Jetty and his investigation reveals that the Jetty was originally constructed somewhere in 1973. P.W.2 further deposed in his cross-examination that it is true that in 1973 the soil test was conducted and the details of boring were recorded in the drawing. The I.S.Code of Practice lays a mandatory provision for investigation of soil for Ports and Harbour structures. It does not specifically cover a case of the nature of reconstruction. However, inasmuch as the nature of failure of the earlier structure have not been determined, the Code of Practice should have been followed to determine the soil characters tics. He also deposed that because there is no conclusive evidence as to why the portion of the Jetty was collapsed, he says that soil investigation is necessary as per the I.S.Code. Ex.X.6 was sent from Madras. P.W.2 deposed that during his visit to Visakhapatnam ending with 20-4-1978, he was shown the letter dt.6-4-1978 marked as Ex.B.1 and Ex.B.1 must have been shown earlier to 19-4-1978. He also deposed that as he only saw Ex.B.1 but did not receive it, he did not mention about Ex.B.1 in his letter Ex.X.5. He deposed that he did not see Ex.B.1 after 19-4- 1978. P.W.2 further deposed that it is not true to say that unless he received original of Ex.B.1, he would not have been able to recollect the date 6-4-1978 in his letter dated Ex.X.6 as he had not seen the original of Ex.B.1 after 19-4- 1978. This witness adds that he noted the date 6-4-1978 i.e., Ex.B.1 in his notes. He also deposed that he made notes about his visits to Visakhapatnam at that time but it is not available at present with him. He also deposed that it is not true to say that VPT has not received Ex.X.5 to Ex.X.7 as he had not addressed these letters. He knows J.K.Baxi & Company were the agents of the owners of the vessel. He also deposed that he had no idea that whether any other Engineer was appointed for this work. He also deposed that he was acquainted with the standard procedure of obtaining tenders by concerns like VPT and there will be a standard procedure for evaluating the tender. He also deposed that a Tender Committee will be appointed to scrutinize and finalise the tenders. He also deposed that there are norms and depending upon them, the awarding of work in pursuance of Tenders should be confirmed by Board of Trustees. He deposed that he had not seen the tender notices, if any, published in newspapers and he was told that the notices were published in newspapers according to norms, but no data was made available to him by VPT. P.W.2 also deposed that it is not correct to say that invariably the contractors quote over and above estimate laid by the Department. He deposed that he had an occasion to see the Notice Inviting Tender in this case with regard to the work to be done for the damaged Jetty and NIT mentioned the work time as 9 months. He also deposed that he learnt that the crafts belonging to VPT were being berthed at the damaged Jetty before the damage to it. It is quite possible that due to the damage to Jetty, VPT had to place their crafts elsewhere in the Harbour. He also further deposed that the probable sustenance of loss to VPT by berthing their crafts at other Jettys which could have been commercially operated depends on the demand. He also deposed that whether the VPT wanted complete the repair work early is a matter to be decided by VPT. He deposed that he had no knowledge about the increase of price by virtue of shortening the work time in Notice Inviting Tender. He further deposed that he was aware of the kind of equipment that AFCONS was using for carrying out the work and VPT does not possess the equipment that was deployed by AFCONS for the work. He deposed that each Engineering Firm has its own norms for quoting its price. He also deposed that it is not correct to say that the reduction of time for completion of work after the time fixed in the NIT will not escalate the price of the work and generally the lowest tenderer will be preferred by any department. P.W.2 deposed that it is also true that tenders would be opened in the presence of participating tenderers. P.W.2 deposed that in his cross-examination that the enhancement of price after the opening of tenders by virtue of shortening of work time depends upon the negotiations between the parties. He deposed that AFCONS is the successors of RODIO HAZARATH FOUNDATION COMPANY an internationally reputed one. Rodio Hazarath Company are specialists in marine works and according to the information shown to him Simplex Ltd., had not quoted for the work. He also deposed that it is not known to him if Simplex have quoted for this work at the excess of 45.41% of the estimated value of the work. He also deposed that he did not know if ONYX have quoted at 19 1/2 lacs at 33.67% in excess of estimated cost of the work. He also deposed that he do not recall to have seen in NIT that the whether an option was given to bidders to give an alternative design of the work. The VPT had provided for recast piles to be driven at site and this was the design of VPT. He also stated that AFCONS have completed the work using cast-in-situ, bored pile, pre-cast beams and laid-in- situ feching. P.W.2 deposed that it is true that it is an alternative design to that of VPT and the price accepted and paid by VPT to AFCONS was for the alternative design and its execution thereof. Ex.A.10 shows the work evaluation as per the VPT design and as executed by AFCONS. P.W.2 further stated that if the work was executed as per the VPT design, the amount of work against items No.12 and 2 of Ex.A.10 would actually have been what has been executed by AFCONS amounting to Rs.15,724/-and item 3 i.e., extraction of Piles would in any case was not done and would not be required to be done. P.W.2 further stated that in his cross-examination that he had not referred to this in his report and he had not compared the two works and their relevant merits. He also did not mention the aspect of cost raising to the tune of Rs.5,97,071/- as it did not open to him to mention in his report when he prepared Ex.X.8. He further stated that unless he see the tender details, he cannot say why Simplex have quoted at that price. P.W.2 in his cross-examination stated that it is not correct to say that if the Departmental design is executed by VPT that there would be no cost reduction. He deposed that it is not correct to say that retendering need not be done when there is competitive bidding even if the number of tenderers is two and he had no knowledge about any other tenders of VPT and it was a general tender called by VPT. He also deposed that there is no ban on calling for limited tenders by concerns like VPT. P.W.2 deposed that there are cases wherever a single tender was placed with a concern like VPT was accepted and depending on the nature of work, there will be time gap between Data of NIT and date of awarding the work. He also deposed that re-tendering involves time but not necessarily cost escalation. P.W.2 deposed in his cross-examination that it is true subsequent to 1970 price escalation for labour and material is provided in works contracts. He also deposed that it is not correct to say that by quoting for the rate of shifting separately the contractor is not paid separately. He further stated that according to him they would have followed the I.S.Code and as per I.S.Code empty boring is not permissible and the contractor has to include this component in his rate and cannot be claimed separately. He also deposed that similar is the case with regard to the shifting of Pile Rig, however shifting of Pile Rig is necessary for carrying out the work. He further stated that according to him in this kind of work what is called as Empty Boring is not permissible and depending on the type of soil Bentenine Slurry or liners will have to be used. P.W.2 further stated that it is not true to suggest that except site clearance, rest of the work was completed by September, 1978. This witness adds that by September deck concreting work was in progress. He further deposed that it is not correct to say that VPT had provided all the necessary information. He also stated that he was not aware that VPT has no photo copying facilities. P.W.2 deposed that it is true if the said facilities are not available with VPT, the firms are to be taken out for the said purpose. He also stated that the undamaged portion of the Jetty was being used at that time but not as a Jetty. P.W.2 also further stated that as he had not seen the Jetty after September 1978, remaining portion which was not then damaged is in the same condition as was in 1978. P.W.2 deposed that it is not correct to say that VPT has awarded the work to AFCONS after taking all the prescribed norms into consideration. P.W.2 further deposed in his cross-examination that he is not aware if the work was audited by statutory body and what observations they have made. In re-examination and also in re-cross-examination certain additional facts had been elicited from this witness.
15. As against this evidence, the evidence of D.W.1 - Captain B.K.Das is available on record who had deposed that at that time he was working as Dock Master for Visakhapatnam Port Trust and he was promited to the said post in the year 1981. This witness also deposed that besides Administrative work, he had to do Piloting work. He also stated that prior to 1981 he was working as Pilot in Visakhapatnam Port Trust. He further stated that before he became Pilot, he worked as Dreger Chief Officer. He also further stated that he entered into service in Visakhapatnam Port Trust in the year 1971 as Dreger Chief Officer. He was a Master Mariner Foreign going and in 1967 he got the said certificate. He also stated that he had his initial training in DUFFERIN Bose Bombay and the training was for a period of 2 years and he did his apprenticeship in Syndia Steam Navigation. He further deposed that before entering into service in Visakhapatnam Port Trust, he worked in various capacities in Sindia Steam Navigation and he was the Chief Officer in the said Syndia Steam Navigation before he left the service and joined in Visakhapatnam Port Trust in 1971 and since then he was working in Visakhapatnam Port Trust. He deposed that Pilot is provided to the ship which is coming to the harbour or outgoing from the harbour and they will meet the vessel at Pilotage ground and the said area is 2 nautical miles from the harbour from the entrance channel. He further deposed that they had a pilot launch and they meet the launch at that place and after meeting the vessel at piloting area, they will board into the ship and the ship will be brought to the harbour. He also deposed that Master of the vessel is incharge for the said vessel till its berth because the familiarity of local conditions of the port, the pilot will advise the master to bring the said ship to berthing and the master has the last word in the matter of the navigation. D.W.1 also stated that he was on duty on 26-10-1976 and he was ordered to bring the vessel inside the harbour and the Dy.Conservator of the Port gives such orders. The ship has to give estimated arrival time telling advance before 48 hours to the Port to make arrangements of its berth and if a vessel comes with a range very high frequency, the port will get the messages from the said V.Br., otherwise they will get the information from on Radio and on an average the Pilot receives 1.02 vessels per day during 1976. D.W.1 also further stated that on 26-10-1976 he boarded into the vessel LALINDA at 13.03 hours. He also stated that the dragger lay-by-Zetty is beyond the inner harbour tourning basing and at the entrance of the North Western Army. In 1976 they were having inner-harbour. After boarding the ship LALINDA, he went to bridge where the Chief Officer of ship was there and he gave him all the instructions regarding the berthing and keeping both star board and port anchors ready for letting go and he also gave instructions securing forward tug. He further deposed that he will go in a Pilot launch and meet the vessel at the pilotating area and the two tugs supply the two lines. He further deposed that after exchange of greetings with the master of the said ship who came on the bridge and he again explained about procedure and also about for keeping both Starboard and Port Anchors are ready for letting go and then the Captain of the said ship passed on said instruction to the Chief Officer and the 2nd Officer of the said vessel and then they weighed Anchor and approach of fairway buoy and stop the engines. He also further stated that at about 13.55 hours, they came to the fair way buoy and they stopped the engines at 13.56 hours. He also stated that when the engines were stopped, the ship was not steering and thereafter they use the engines for steering purpose and they were stopping engines and giving dead slow ahead movements for steering purpose. He also deposed that they passed the dry dock buoy and then he stopped the engines. He stated that at about 14.13 hours when the ship was near the Sonametta Buoy, he gave half of Astern on the engines and about1/3rd of the ship was passed on Sonametta Buoy and there was slight head way and half astern was given on the engines and the ship developed the head way. He also stated that normally if the forward tug gives tight rope, then the ship develops head way and when the ship developed head way at 14.14 hours, he ordered for full astern on the engines and at the same time he asked to let go the Starboard Anchor. He further stated that for some reason or other, the Chief Officer could not drop the Star Boar Anchor and all the instructions were given to the master of the vessel and then the star board anchor did not drop, he instructed the master to let go the Port Anchor. He also further stated that he instructed the after tug Dolphin to come in a straight line and pull the ship in the reverse direction and also at the same time he ordered the forward Tug Souri to pull the ship's bow to star board. He also deposed that after he had pail out two shackles in the water, he asked the Master to hold on and the same was conveyed to the Chief Officer and they could not hold on and this could be due to brakes burning and four shackles had run out. He also deposed that at 14.15 horus, the Tug's rope had parted and there were dredger pansy, oil barge and T.S.Mekhala and the ship was definitely going to hit them and the forward tug would have been crushed and the ship hit the dredger lay-bye-jetty. He also further deposed that the Port Tugs did a splendid job in avoiding serious major accident. He also deposed that at 14.16 hours the Engines of the ship stopped after it was hit to the lay-bye-jetty. He also further stated that he informed the Master that the engines might have been going ahead instead of astern and that is the propeller movement. He further deposed that the ship was going ahead was confirmed by the After Tug Master and the Decks Serang and also the relieving crew of the Dolhin. He also stated that the master has got the power to contradict any order or instructions given by him and he agrees with the same, he passed on it to the Chief Officer or 2nd Officer. He also further stated in his Chief Examination that at 14 and 11 1/2 the ship was near the entrance of the Dry Dock Port and it was at the bend and not the turning. He further stated that at 14.14 hours ship bow was at the turning. He also stated that it is not correct to say that the vessel was close to the DLB Jetty. In the cross-examination of this witness, this witness deposed that he hold Masters Certificate of Competency and he got the said degree in the year 1967. He also stated that he had been Commander of a Sea going vessel and he was a Commander for the first time in the year 1980 that is only after the present accident. He further stated that he was a Chief Officer of a Dredger but not a Commander and the length of service of this witness is 20 years right from apprentice to Master of the vessel. He also stated that before joining in VPT, he was not Commander for any sea-going vessel. He further stated that before becoming a pilot and obtaining licence, he had undergone a training course and also taken an examination to qualify as a Pilot and he obtained his license in March, 1972. He also further stated that initially his licence was restricted to handling vessels upto 525 ft. length. He also stated that he had continued for six months and for another six months full license to handle any type of vessels. He also further stated that to obtain full license he to undergone a training for a period of one year. He further stated that it is a normal procedure to discuss with the master of the vessel about the procedures of the making fast the tugs, keeping anchors ready and berthing the ship in the berth. He also stated that he gave advise to the Master of the ship about the various maneuvers for berthing the vessel. He also stated that while bringing the vessel in, it is necessary to inform the Master may not be aware of. He also stated that it is usually discuss about the various maneuvers with the master of the vessel but in this case there was not occasion for him to discuss any important problems and it is not in practice to put the maneuvers in writing but it is always oral, except for the engine movement. He also stated that he was aware that the Master was Chinese National and just like any other master, he has got sufficient knowledge of work of English and he was not aware whether it was the first voyage to Visakhapatnam to the said Master. He further deposed that it is not possible for any Master to enter or sail out without the assistance of the Visakhapatnam Port Pilot and in other words, there is a compulsory pilotage prevailing in Visakhapatnam and most of the Indian Ports. He also further deposed that the reason for using a Pilot in the Port is the ignorance of the Master of the local terrance and the peculiarities of the area like tides, depths, obstructions, marked and unmarked wrecks and which are peculiar from Port to Port. He also stated that it is true that the assistance of the Pilot is given due to the Master's unfamiliarity with local conditions. He further stated that it is correct to state that part of his duties required him to give all engine, steering of the main vessel including instructions to the tugs. He also stated that the relationship between the master and pilot is that the pilot will navigate the ship and give all instructions but the master will have authority to countermand the pilot's order if there is time or occasion to do so. He also stated that in this case the ship Lalinda was granted Q-1 berth and he intended to place the vessel star-boat side along side of the said Q-1 berth and he had informed the Master and the Chief Officer about his intention. He also stated that it is not true to say that in the present case he asked the Master to keep ready port-side anchor and not the star-boat side anchor. He also stated that he still maintain at the time of berth they keep ready both star-boat side anchor and port-side anchor. He further stated that it is not true to say that in the present case, he directed the master to keep ready port- side anchor and not the star-boat side anchor. He further stated that the master and crew followed his instruction till he asked the master to drop the star-boat anchor which he could not do it and the movement of the steering of the vessel at that time is not a peculiar one since the engine was stopped and he had given a statement to the Port Conservator about the incident and in the report, he had not stated about the peculiarity of the steering. He also deposed that it is not always usual practice to stop the engines at the fare-way buoy, but to have better control the engines would be stopped at that point and once again the engine movements were given again for steering purpose. He also stated that the tug lines used were the combination of wire-ropes and nylon ropes or may be Monila ropes and wire ropes of thickness of 36 to 38 mil.meters and nylon ropes were of 80 mil.meters and Monila ropes much more to the said size and he is aware of the strength of the rope and he is not aware of the breaking strength of these ropes. He further stated that the vessel was moving while negotiating the turning basin under his instructions but its control and command was still with the Master and normally, the Master has to follow his instructions if they are in normal and if the Master agrees with him. He further deposed that to go to the berth, it is necessary where the ship would be completely stopped in the turning basic and this can only be done by giving sturning movements on the engines. He also stated that when stern movement is given to the engine with any ship with right handle propeller due to the transfers trust the ships have a tendency to turn its star-boat, and also it is necessary to bring off the tug which is normally on the ports side of the ship at the time of entering to turn of the ship and in that process also the tug gives sheer. He stated that according to him, the ship did not stop as instructed by him. He also deposed that it is not true to say that he had taken circulatory route to turn the said vessel at that point but in fact he had to stop the ship and take half the tug and turn and he had instructions half turn to stop the ship. He also stated that it is not correct to state that he had given a circulatory moment and the moment which he had given is a circulatory, he had a half-stern movement, still the vessel head-way and then he asked the Master to give full 'S' turn and also drop star-boat anchor. He further stated that the reason for the ship head-way may be due to the forward tug giving a pull and for a small ship it develops head-way due to pull by the tug which is not peculiar and therefore he gave instructions to full 'S' turn and to drop the star-boat anchor. He also stated that he do not know what was the reason why the Chief Officer would not drop the star-boat anchor. He further stated that it is not true to say that he had asked the Master to keep ready only with one anchor and not both the star-boat anchor and port anchor and he do not consider that his instructions to drop star-boat anchor as faulty. He also further stated that it is not correct to say that the ship hit the jetty as the tug lines were broken. He also stated that even the tug lines were in tact, the said accident would have been happened and all the things are happened in full succession from the stoppage of the engine till it hit the jetty. He further stated that it is not true to say that the said ship hit the jetty because of his faulty orders and deficient tug lines. He also stated that it is not true to say that because of his faulty orders the said incident occurred suddenly and the Master could not countermand the orders given by him. He further stated that it is not true to say that the master had no time to countermand my actions as the things happened so quickly and he had no time to countermand the decision given by him. He stated that it is not the normal practice in the port to use only the tugs without engine movements to get at the berth and he does not agree with the suggestion that the vessel could have been moved with the help of the tugs without the use of engine and this is not the normal practice even if its lost steering to take the vessel to the berth with the help of the tugs without engine movements. He further stated that both the forward and after tug lines broke at 14.15 hours. He stated that it is not true to say that the lines used for securing and pulling the shop worn out and it is deficient stage. He further stated that because the lines tugs Souri and Dolphin parted, they had requisitions two other tugs Nagarjuna & Siri to help the vessel move at the berth. He also stated that the master did not say anything when he suggested that the vessel going ahead instead of astern and he did not tell the Master to consult to Chief Engineer or Junior Engineer to verify the engine. He further stated that the vessel was going ahead was confirmed by the tug-serrand and crew of the dolphin. He further stated that it is not correct to say that the person standing on the tug and when the after line brakes and when the tug was thrown away the person standing on the tug would have an impression that the ship was moving forward. He also stated that he do not know that the said vessel was having inter-locking system and further stated that he did not verify when he took charge of the vessel, whether the vessel had an inter-locking system and the witness volunteers that normally they do not verify whether it is inter- locking system or not. He further stated that it is not true to say that he had not given proper instructions to the master to keep the normal speed while negotiating to get into and that is the reason the accident took place. Ex.A.15 is the letter written by the Harbour Master wherein he has agreed to verify the inter-locking system and personally he is not aware of the contents of Ex.A.15. He also stated that he was not aware whether the inter-locking system was inspected after the accident and when the vessel was in berth. He also stated that it is true that when the ship is approaching the berth the way is taken off completely from the ship and speed is not at all used. At the said operation engines are used. He further stated that it is not true that he had not taken all the precaution and that is the reason why the accident occurred. He also stated that under certain conditions and with the approval of the Deputy Conservator of the Port the ships are handled without engines with the help of the third tugs and in such process, there should not be functioning of the engines. He also stated that it is not true to say that even if the tug lines are in tact, the accident would not have been averted. He further stated that even after the accident, the vessel was taken to the intended berth with the help of engines and tugs. In the re-examination this witness deposed that if any vessel enters into Port, the captain of the vessel will be in possession of hydrography and navigation chart and they indicate about the dredging, the hazards and wrecks if any and depth of the sea and the port installations would also show the said charts.
16. D.W.2 was working as Executive Engineer in the Visakhapatnam Port Trust since 1959. This witness also deposed that he was working in Civil Engineering Department. This witness also further deposed that there is a jetty by name lay-by-Jetty in Port Trust and the said Jetty was constructed in the year 1972- 73. D.W.2 also stated that in the year 1976 there was damage to the said Jetty as ship by name Lalinda dashed against the said jetty. This witness further deposed that after the said accident, they had inspected the said jetty and prepared the estimation for the said damage and he submitted the report. He also deposed that the two parts of the said jetty were damaged and one part is in tact and one part of the said jetty was damaged and one part of the said jetty damaged has to be reconstructed and part of the said jetty has to be repaired and so they called for tenders for the said work. He further deposed that they received 3 tenders for the said work and he filed the proceedings of Tender Committee Ex.B.1A and out of the said three, AFCONS was the lowest tenderer. He also stated that AFCONS company is situate in Bombay and they are experts in Marine works and originally it is a foreign collaboration by name RODIOHAZRAT and subsequently it was altered as AFCONS. D.W.2 further stated that after accepting the lowest tender, they gave the work order to the said company under Ex.B.2 with contract conditions. D.W.2 also further stated that as per the said contract, the said firm completed the work and they paid the amount by way of final bill to the said company under Ex.B.3. He also further deposed that they paid a sum of Rs.16,14,383/- to the said work and he was present at the time when the said work was executed and the actual required work is done to the said jetty by the said company as per the contract. In cross- examination this witness deposed that in the year 1976 he was working as Assistant Engineer. He also deposed that there is a record to show that the said lay-by-jetty was got constructed in the year 1972-73 and the said report is not readily available with him. He also stated that the Engineers of the Port Trust prepared the design of the said jetty in the year 1972-73 and not by any other 3rd party and the Contractors are Orissa Construction Corporation and he cannot give what is the contract value. He further stated that their Engineers inspected after the construction was completed and prepared a report. He also deposed that at present he cannot give the name of the person who gave the design at the time of construction of the said jetty. D.W.2 also stated that he cannot say whether the person who gave the design for the construction of the said jetty has got any special qualification in marine construction engineering and he cannot say whether the said person prepared any design for the construction of the other jetty before giving the design for the present jetty. He also stated that immediately after the said accident, the estimate for the said damage was prepared, but he cannot say how many days after the accident it was prepared and it was prepared either in the last month of 1976 or in the beginning of 1977. He further stated that before the estimation was prepared, there was the survey assessing the damage for them by the Port Engineers but he cannot give the names of the said persons. D.W.2 further stated that the survey must have been made during the month of December, 1976 or January, 1977 and no independent survey was conducted with regard to the said damage. He also deposed that he is not aware whether the Port Trust informed the plaintiffs about the intended survey asking them to be present on that day and the survey report may be available in the Port Trust. D.W.2 further deposed that AFCONS commenced the execution of the contract some time in the November or December, 1976 after Ex.B.2 and no survey was conducted at the time of commencement of contract, that the said jetty existed in the condition as it was in existence soon after the accident and the AFCONS started the work in the month of November, 1977. D.W.2 deposed that it is not true to say that the work that was ultimately carried is not the work that was contemplated, for the repair of the said jetty. He also deposed that the design that was accepted was the alternative design to the one contemplated under the original tender which was ultimately accepted by both the parties. He also stated that according to the altered design work, the original contemplated work relating to the extraction of damaged piles was not carried out and the entire steel was supplied by the Port Trust. Ex.A.10 does not include any claim for extraction of piles and Ex.A.10 includes the amounts towards contingency staff charges, freight and handling charges of the stocks and also departmental charges. He also deposed that total of the said expenditure is Rs.2,74,293-35 ps. He stated that contingency charges are unforeseen charges and contingency charges are different from staff charges. Contingency charges are claimed at actual expenditure. Column No.2 of Ex.A.10 gives the particulars of estimate. The actual amounts claimed under the three heads mentioned are shown in column 6 of Ex.A.10. He also stated that he cannot say the particulars of the said estimate. He deposed that he can say that the contingencies had arisen during the execution of the contract in respect of which the claim is made. He also stated that he cannot say what the said contingencies are and there may be a record to show the particulars of the contingencies. He deposed that the claims in respect of items 2 and 3 mentioned in Ex.A.10 are prepared as per records and the records contained all the details. He also deposed that he cannot say whether the said record is available in the office and he further deposed that earlier he had seen the said record but now he cannot say whether the said record is available in the Office. D.W.2 also deposed that staff charges indicate the charges to the staff engaged by the department for the execution of the work and they are the employees in the Port Trust. He stated that freight and handling charges claimed in Ex.A.10 represents the expenditure incurred by the Port Trust handling charges for procuring the material and to give it to the contractors and this forms partial of the costs of the material. He also stated that the entire cost of material supplied by the Port Trust will be recovered from the contractors that is at the rate at which the cost of the material is recovered is fixed in the contract and there must be documents to support the claim relating to freight and handling charges available in the office of the Port Trust. He also stated that departmental charges are incurred by the Port Trust authorities indirectly. He also deposed that it is not true to say that the percentages mentioned in Ex.A.10 are covered in the contract. He also stated that estimate prepared will include charges, freight and handling charges. He also deposed that estimate is with regard to the probable value of the particular work to be executed. D.W.2 deposed that it is not true to say that the estimate mentioned in the tendered documents is the estimate mentioned above. He also deposed that the amount of Rs.14,56,895/- mentioned against column 5 in Ex.B.2 is same estimated amount mentioned in the tender. There will be nothing either in the tender or in the contract to indicate that the above estimated value mentioned in the tender does not include the percentages mentioned above. He also stated that the actual amount that was paid to AFCONS is Rs.16,14,383/- as per Ex.B.3. Ex.A.10 includes the claim towards loss sustained by the Port Trust, due to non-utilisation of the Jetty for a period of 645 days from 26-10-1976 to 31-7-1978 besides interest on the capital diverted and the Port Trust must be having documents to show to substantiate loss due to non-utilisation of the jetty for 645 days. He also stated that the claim for interest on the capital diverted is the interest of the amount incurred by the Port Trust. Ex.A.10 does not give the details with regard to the date when, which and date upto which or the date at which interest is paid and he is not aware of the document regarding the payment of interest. D.W.2 also deposed that he is aware of the fact that the plaintiffs gave Bank Guarantee for Rs.16,00,000/- before the ship used to have Port Trust, but the Bank Guarantee was given towards the security for the damages. He also deposed that he is not aware whether by the time the Bank Guarantee was given whether the damages assessed or estimated.
17. D.W.3 the retired Deputy Chief Accounts Officer had deposed that he served for 34 years in the same department and retired from that department. This witness also deposed about his duties. Further this witness deposed that he inspected and checked the bills relating to rectification work to the damaged Dredger lay-by-Jetty. He also deposed that the said jetty was damaged by ship Lolenda. He further deposed that the rectification work was entrusted to AFCONS, Bombay and before entrustment of the work to that company, they have called for open tenders. He stated that the AFCONS filed their lowest tender. He further stated that after said work is completed, they had served a bill on the plaintiff to reimburse the said amount incurred by Port Trust. Ex.A.10 is the said letter with enclosures. He also deposed that he sent the said bill Ex.A.10 for FA & CAO and the said bill was for Rs.28,90,985-35 and he had also enclosed two bills and one completion report and one bill containing expenditure incurred for the work of dismantling and removing the damaged portion and interest on capital diverted, and another bills is for loss to the Port due to non-utilisation of jetty for 643 days. He also stated that the amount of Rs.3,41,375/- is claimed at Rs.500/- per day for certain days and Rs.575/- for the remaining in the total of 643 days. He further stated that berth charges are calculated on the basis of Ports Scale of rate and they are the statutory rates prescribed under Major Port Trusts Act and they have been approved by the Port Trust and Government and they have been published in the Gazette. He also further stated that they claimed interest on account of diversion of Ports money for the purpose of this construction work, which should have normally been deposited by the company well in advance. He also stated that the bill dt.16- 10-1979 Ex.B.4 is signed by Capt.Patnaik and he can identify his signature and the said bill was prepared for the repairs carried out to Tug Shoure, now being called as Sumathi. He also deposed that the bills were checked in the RS. Section and the bill was served for Rs.10,934-35 and the said amount is not yet recovered. Ex.A.30 was signed by Capt. Patnaik and this was served for repairs done to Water Barge, damaged by M.V.Lolenda. He further deposed that the said amount was adjusted from the deposit account of 3rd plaintiff and similarly damages caused to the Tug Dolphin and water barges were also recovered by adjusting deposit accounts in the account of 3rd plaintiff and as they are entitled for the said amount, they have adjusted the said amounts in the account of 3rd plaintiff. He also deposed that defendant-Port encashed the Bank Guarantee given by the plaintiff for Rs.16 lakhs and the said amount was adjusted towards the outstanding amount due by the plaintiff No.3. He further deposed that still the plaintiffs are due a sum of Rs.12 lakhs and as the interest is increasing, they have adjusted the Bank Guarantee and to avoid the accumulation of further interest. In the cross-examination this witness deposed that for the Accounts department, they have no way concerned with regard to preparation of estimates, sanction of the same, and calling of the tenders and award of work. He also stated that the initial preparation of the same will be made by the concerned department and they will only scrutinize the same and the concerned department will prepare estimate with regard to any proposed work. He deposed that Port maintains a schedule of rates which are periodically revised and the proper cost of the work will be prepared on the basis of the schedule of rates. He also deposed that no part of the work was done by the Port Trust, but the entire work was given to the contractor and it was itemory rate contract work. He also deposed that iron and cement will be supplied by the port and the cost of the same will be deducted. He further deposed that in respect of any contract work, the bills will come to their department from the concerned department for scrutiny and for forwarding to the concerned parties. He also further stated that the bill under Ex.B.4 was not prepared in their department, so also, except the covering letter attached to Ex.A.10 was also not prepared in their department. D.W.3 also stated that the general charges at 150% and stores general charges at 10% claimed in Ex.B.4 represent the over head charges and the details of these claims will be available in the Office by the concerned department. D.W.3 deposed that the claim for indirect charges of 23% and the departmental charges at 20% in Ex.B.4 are based in C.P.W. Accounts Code, followed by Administrative orders and the four items are not actuals i.e., general charges, stores genl. charges, indirect charges and deptl. charges. He further deposed that the claim on account of contingencies at 3% is Rs.19,112-64 and it is the actual amount incurred by the Port Trust, on account of the contingencies arising during the execution of the contract work and it is not possible to mention the details of those contingencies from Ex.A.10. He also further stated that Rs.20,98,676/- is the actual amount incurred by the Port Trust towards the execution of the contract in question and the amount was not paid to the contract in a lump sum. He stated that he cannot now say the number of bills under which this amount was paid. He also deposed that this amount was paid from the funds of the Port Trust and this amount was paid from out of the amount borrowed by the Port Trust from the Central Government. He also stated that he cannot say how much amount was borrowed by the Port during the particular years in question. He deposed that the amount borrowed from the Central Government was not for execution of the contract work in question and these details will be reflected in the account of the Port Trust. He further stated that the interest is calculated @ 10% and they did not notify to the plaintiffs that they charge the interest at 10%. He also further stated that the deposit has to pay for the entire amount of the work in the first instance before commencement of the work. He also deposed that basing on the estimate they had demanded the plaintiff to deposit Rs.16 lakhs and the plaintiff furnished a Bank Guarantee for the said amount. He also stated that it is not true to say that the said amount was collected towards security and not towards the cost of the damage. D.W.3 also stated in his cross-examination that the claim for loss due to non-utilisation of jetty for 643 days amounting to Rs.3,41,375/- was arrived at the rate of Rs.500/- per day for certain days and at Rs.575/- for the remaining days and the said details are not mentioned in Ex.A.10. He also stated that these rates for Jetties have been approved by the Government and the office will have record of the approved rates for Jetties and Port would not pay any interest for the amounts deposited into the Port Trust. Ex.B.4 was sent on 16-10-1979 and for the first time, the other bills were sent in the month of October, 1980. He further stated that the covering letter attached to Ex.A.10 mentions that the Bank Guarantee for Rs.16 lakhs was encashed and the balance amount of Rs.12 lakh and odd was claimed and they did not demand that they will encash the Bank Guarantee if the plaintiffs fails to pay the amount covered by Ex.A.10. He also deposed that unless he look into the files he cannot say whether there is a letter asking them to pay the amount and he did not remember whether any demand was made on the plaintiff for payment of any part of the amount covered by Ex.A.10 at any time prior to October, 1980, except the amount covered by Ex.B.4.
18. D.W.4 who was working as Tug Master of Class II in Visakhapatnam Port Trust, Visakhapatnam, was examined who had deposed that even till today he is the Master of Tug 'Dolphin' and this witness further deposed that even in the month of December, 1976, he was the master for the said Tug. He also stated that on 26-10-1976 when ship Lalinda enters into the Port of Visakhapatnam, he was Master for the Tug 'Dolhpin' and they follow the instruction of the Pilot of the ship. He further stated that their tug is Stern Tug to the said ship. He also further stated that when the said ship came to the Sonametta, the said ship was stopped and the ship was stopped but the vessel did not stop and it was moving inspite of using Stern and it is going forward. He further stated that through walkie-talkie he gave instructions to the Pilot Office that the vessel is moving forward and then the Pilot Officer informed them and even on commission of stern the ship is not stopped and it is going forward and due to that movement of ship, it went and dashed against the Jetty lay-by. He also further stated that then they tried to pull back the vessel with their tug, the wire throwing wire was cut off and he came to know that the cost of wire may be Rs.4,000/- but he did not know personally as he never purchased the same. He stated that because the said vessel dashed against the jetty, the towing wire was snapped. In the cross-examination this witness deposed that the Pilot Officer will go to 'P' plag and bring the vessel to the Port and the Pilot Officer will bring the ship inside the harbour. He also deposed that there will be two tugs, one in front of the vessel and the other on back of it and the said tugs will be tied with a towing wire to the ship on either side and the said wire will be available in the tug itself and the circumference of the said rope will be 4 inches and the said wire for being used for 2 months prior to that day. He also further stated that if there is any doubt with regard to the said wire, they will change the same immediately. He also further deposed that the Chief Officer will deliver the said wire and there will be record to show the same. He further stated that whenever he received the wire, he acknowledges the same in a book maintained by the Chief Officer and if there will be any damage, they will change the wire, otherwise they will use the same wire. He further stated that he cannot say the tonnage of the ship Lalinda. He also stated that they will use the same rope for all the ships at the time of towing and the said wire would not cut as it will have the spring action and the Officers will test the spring action, but he did not get it tested by himself whether the said wire action is strong enough to withstand even in case of spring action. He further stated that he do not know whether the snap wire was sent for finding out the reason for the same and whether there is any report of the same from a qualified person. He stated that by the time the ship reached Sonametta, it was stopped completely for few minutes and then immediately it moved forward. He further stated that he does not know the reason as to why the said ship moved like that and on that day he gave a report of the same to his Chief Officer with regard to the snapping of wire.
19. D.W.5, the Master in the Shipping Yard in Deputy Conservator Department, Visakhapatnam Port Trust was examined who had deposed that he was working as Tug Master for Sumathi Tug since 1970. This witness also deposed that on 26-10-1970 he worked as Tug Master for the Tug Sumathi and on that day, his tug was requisitioned to bring the vessel M.V.Nalanda. He deposed that they will pull the said vessel as per the directions of the Pilot Officer. He also deposed that on that day, there are two tugs to the said ship, one is forward and another is stern. He also stated that his tug was used as forward tug to the said vessel and the Dolphin was the stern tug for the said vessel. He deposed that when their tug was pulling the vessel and at the place of turning basin in inner harbour, the said vessel was stopped by the Pilot Officer. He also deposed that the Pilot Officer gave instructions to him through walky-talky asking them to stop their tug in a straight line and then once again, the Pilot Officer gave instructions to pull the vessel through their tug. He further deposed that at that time, the ship Lalinda, is in a stop position and instead of the said vessel was stable, it started moving forward and it was moving so speed towards forward, then he was asked to pull the straw boat side. He further deposed that then the Pilot Officer gave instructions through walky- talky that the said vessel was stopped and asked him to start the vessel with full speed and then they pulled the vessel to some extent. He also stated that in that operation, tugging wire was snapped due to heavy strain and because of that snapping of wire, his tug escaped from mishap and went forward and the vessel was dashed against Dredger lay-by-Jetty. He also deposed that if he could not pull the said vessel like that the said vessel would have dashed against the other dredger jetties which are there and would have caused more damage to the jetties also. He deposed that after the stern-wear rope hit the skylite in the engine and it completely damaged, the skylite along with the glass fittings and cost of the stern-wire tope and the skylite would be approximately to a tune of Rs.8,000/- to Rs.10,000/- and the accident was caused due to the wrong movement of the vessel. In the cross-examination this witness deposed that their tug will be in front of the vessel and after the vessel there would be another tug and all will be in one line. He also stated that his tug will be at the distance of 250 ft. away from the vessel and the back tug will be at a distance of 50 ft. from the vessel and the width of the channel at that place is 800 ft. He also stated that at that time, the vessel was going to Q-1 berth and the Q-1 berth was on the right side of the turn basin, when they were entering into the Port and lay-by-jetty is on the left side. He also deposed that the width of the Lalinda ship is about 70 to 80 ft. He stated that from the fair way boy upto the old break waters, the vessel will be under the control of the master of the vessel and from the break waters till it is berthed, it will be under the control of the Pilot Officer of the Port Trust. He further stated that at the inner turn basin, the vessel has to be stopped and it has to be turned round and the ship has to be taken in a reverse position into the place where it has to be berthed and at that place, full stern was given to the said vessel to stop the movement of the vessel forward and after giving the full stern, the vessel will be stopped within 5 or 10 minutes. He further deposed that in his cross-examination that the said vessel has come to the halting position after giving full stern and then the Pilot Officer gave instructions through walky talky to them that the vessel was stopped and asked them to pull the vessel. He also stated that then they were pulling, he received instructions once again that the vessel was moving forward and asked him to pull the vessel in a full speed and then the vessel started moving forward and the vessel was moved forward in a speed all of a sudden but he cannot give at what speed it was moving at that time. He further stated that he does not know as to why the said vessel moved forward and it would go forward if it is head way. He also stated that as it went wrong, he cannot say at whose fault the said vessel went wrong. He stated that both the tugs will maintain log books and they will enter in the log book at what time the tug was berthed and they will record in the log book if any accident occurs and after the accident, he gave written complaint to Harbour master. He also stated that he cannot say when the tug wire was purchased by the Port Trust. He also deposed that he cannot say at what rate the said rope was purchased. He further deposed that his signatures will be obtained at the time of taking the wire from the Stores and the same will be entered in the log book and he did not get tested the said wire after it was snapped. He also stated that he can give the approximate cost of the sky light door and the sky light is a frame with glasses to provide ventilation. He deposed that he does not know for how much amount the said damage was estimated by R.O.R. and the actual cost incurred by the Port for the replacement of the same. This witness also was reexamined.
20. D.W.6 who was working as Harbour Master in Visakhapatnam Port Trust had been examined who deposed in detail several of the facts. This witness deposed that he knows Capt.P.D.Gupte who was working in Visakhapatnam who is senior to him and that he joined as Pilot and promoted as Harbour Master and further promoted as Deputy Conservator and at present he is not working in the Port and from Visakhapatnam he has gone to Marma Goa as Deputy Conservator and he left Goa Port Trust and went and joined in Private Organization Chowgulay and to know where he is, they sent telex messages under Ex.B.5 to Marma Goa Port Trust and Chowguley Organisation and under Ex.B.6 remainder telex message was also issued. He further stated that the Deputy Conservator, VPT also issued telex message under Ex.B.7 to Marmagoa Port Trust ascertaining the particulars of P.D.Gupte but they did not get any reply from him and afterwards, they contacted the agents of local Chowguley Company and Ex.B.8 is the message sent by Chowguley issued to the local agents of Chowguley stating that Gupta is not in their service and they did not have the present address or whereabouts. He further stated that he can identity the signature of Gupte and Ex.B.9 contains the signature of the said Gupte. He also further stated that Ex.B.10 is the file with regard to the enquiry excluding the statement and report of B.K.Das and also one Driver Satteyya conducted by Capt.Gupte as Enquiry Officer under Section 358 of Merchant Shipping Act and Ex.B.10 contains the report, Ship Officers, Master, Crew of the vessels and the opinion report of the said Gupte. In the cross-examination of this witness, he deposed that he is not personally aware of anything with regard to the enquiry that was conducted by Capt.Gupte. He also stated that he could not find from Ex.B.10 that inner channel chart which is mentioned at item No.14 at Ex.B.9. He further stated that Ex.B.8 was received by the local agents of Chowguley from Maharastra Ship which is telex address of Chowguley. He further stated that he does not know who received the said message Ex.B.8. He further deposed that Ex.B.8 was not received with any covering letter and Ex.B.8 does not contain any stamp or initials of the Officers of the Port Trust showing that it is received at the Port Trust.
21. This is the evidence available on record. The reliefs prayed for in the suit already had been specified supra. Strong reliance was placed on Transworld Shipping Services (1 supra) wherein the Apex Court at paras 6, 9, 10, 11 and 13 observed as hereunder:
We have been taken through the Regulations and Rules which have been framed pursuant to Sections 123 of the Major Port Trusts Act, 1963. It has been urged that the Regulations deal only with rates for services rendered by the Port Trust. It is submitted that the Regulations do not cover a case where a claim for damage is made by the Port Trust. It is urged that the Regulations and Rules there under do not empower or authorize the Port Trust to recover damages from the agent. It is urged that the right of the Port Authorities to recover damages is covered by Sections 116 and 131 of the Major Port Trusts Act, 1963. It is submitted that the Port Trust Authorities must recover the damages only from the owner of the vessel and cannot seek to do so from the agent. In support of this submission, reliance is placed upon the case of Ednasa Shiping Co. Ltd. v. Board of Trustees, Visakhapatnam Port .
It must be noted that such a contention was not taken in the Writ Petition. It, however, was urged before the High Court and the High Court has dealt with it. It must also be noted that the Writ Petition was challenging the action of the respondent Port Trust in withdrawing services to the appellants. The appellants have no right to insist that such services be rendered. Such services are rendered on the basis of the letter of consent given by the appellants under Rule 5 of the Regulations. This letter of consent states that the Port Trust would be free to adjust "all dues payable" in the deposit account. We are unable to accept the submissions that the term "all dues payable" must be restricted to dues payable in respect of services rendered by the Port Trust. The term "all dues payable" is wide enough and cannot be given a restrictive meaning. Section 230 of the Contract Act would not apply because by giving the letter of consent the appellants have entered into a contract to the contrary. On the basis of the letter of consent, the Port Trust allowed the appellants to operate. The appellants cannot then turn around and claim that he will not clear "all dues".
Even otherwise in respect of this particular ship, the appellants had given a letter dated 30-8-1985. Even this letter permits the Port Trust to debit "port dues". We are unable to accept the submission that the term "port dues" must be restricted to only dues which are in respect of services rendered for the unloading of the goods. The whole purpose of having the deposit account and of having a letter of consent, from agents, is to see that the Port Trust which has to carry on the business of maintaining and running the port is not required to go running after foreign ships. It is the agents, who act on behalf of foreign ships who must take on the liability with their own consent. The agent can always recover from the owner of the ship.
We are in agreement with the observations in the impugned Judgment that merely because a right is given under Sections 116 and 131 of the Major Port Trusts Act does not mean that recourse to other remedies cannot be had. In other words, the right given in Sections 116 and 131 can be exercised over and above any other right or remedy which the Port Trust may have.
Finally, it must be mentioned that if any person has any grievance against the claim raised by the Port Trust it is always open to that person to challenge that claim and file a suit. Neither the appellants nor the owners have till this date challenged the claim raised by the Port Trust. Therefore, it cannot even be said that the amount was not due."
The Division Bench of this Court in Ednasa Shipping Co. v. Trustees, Visakhapatnam Port while dealing with the Major Port Trusts Act and the Regulations framed by Visakhapatnam Port Trust Board under Section 123, Regulation 42, observed at paras 6 and 7 as hereunder:
Now we will refer to the relevant provisions of the Act and the Regulations. Under Section 116 of the Major Port Trusts Act, if through the negligence of any person having the guidance or command of any vessel, any damage is caused to a jetty, the amount of such damage shall on the application of the Board be recoverable, together with the cost of such recovery, by distress and sale under a Magistrate's warrant, of a sufficient portion of the boats, masts, spares, ropes, cables, anchors or stores belonging to such vessel. But, no Magistrate shall issue such a warrant until the Master of the vessel has been duly summoned to appear before him and, if he appears, until he has been heard. No such warrant shall also be issued if the vessel was at the time under the orders of duly authorized employee of the Board and the damage caused was attributable to the order, act or improper omission of such employee. A prima facie reading of that section shows that an pln has to be made to a Magistrate only to recover the amount of damages, but not to determine the amount of damages. It does not show that the Magistrate has to determine the quantum of damages. Section 131 of the same Act provides, that without prejudice to any other action that may be taken under that Act, a Board may recover by suit any rates, damages, expenses, costs or in the case of sale the balance thereof, when the proceeds of sale are insufficient, or any penalties payable to, or recoverable by the Board under this Act or under any regulations made in pursuance thereof. Thus, this Section gives a remedy of a suit also to the Board to recover damages. Basing on these two Sections, it is argued by the leaned Counsel for the appellant that the Port Trust can proceed only under these two Sections to recover the damages, but it cannot itself determine it and call upon the appellant to furnish a Bank Guarantee with the terms mentioned therein. Here we may note that the Port Trust has not taken any action either under Section 116 or 131. Now we will refer to Regulation 42. The Regulations are made under Section 123 of the Major Port Trusts Act. Regulation 42 says, that the Masters and Owners of Vessels shall be held liable for any damage whatsoever that shall have been caused by their vessels or servants to any of the works or property of the Board and the Board reserves the right to detain their vessels in Port until security has been given for the amount of damage caused. This Regulation shows that if damage is caused to any of the works or property of the Board by the Vessels or servants, the Masters and Owners of the Vessels are liable for that damage. The Board has the right to detain their vessels in the Port until security is given for the amount of damage caused. It implies that the Board can estimate damage and call upon the Master or the Owner of the Vessel to give security for that amount. If he does not give such security, they can detain the vessel in the Port. It cannot be said that it can be invoked only after action is taken either under Section 116 or Section 131 of the Major Port Trusts Act.
The next question for our consideration is whether the power given to the Port Trust Board to take security under that Regulation gives them the power to impose the conditions mentioned in the security bond. Regulation 42 simply speaks of security. It means, it can be even a cash security for the amount of damage caused. Therefore, we are of the opinion that the Port Trust Board is not precluded from calling upon the appellant to furnish a Bank Guarantee which it can encash. Equally, it cannot be said that the conditions imposed in the Bank Guarantee are not justified in the circumstances of the case. The vessel belongs to a Foreign National. It is not possible to recover the sum, once the vessel leaves the territorial waters of the country. The Port Trust Board cannot be compelled to go to a Court of law for determining the damage. The Board cannot wait until the damage is determined by a Court of law. They have to immediately repair the jetty. Otherwise, the operational efficiency of the Port will go down and there will be complete dislocation and other Vessels which have to come in, cannot be provided with berths as per the schedule. If the appellant is aggrieved by the decision of Board regarding the assessment of dage, he is not precluded from moving a Court of law. The learned Counsel for the appellant has not brought to our notice any provision of the Act which precludes the appellant from filing a suit. On the other hand, Section 120 of the Major Port Trusts Act makes it clear that even the appellant can file a suit. In these circumstances, we are of the opinion that the conditions imposed by the Port Trust Board in the Bank Guarantee are reasonable and, they are entitled to impose those conditions under Regulation 42. It is not shown to us that they are contrary to any provisions of the Major Port Trusts Act. In this connection we may also refer to Section 65 of the Major Port Trusts Act, which says that Port- Clearance shall not be given until the amount payable under the Regulation had been paid by the Owner or the Master of a vessel. If the appellant is not prepared to give the Bank Guarantee as stipulated by the Port Trust Board, his vessel will not be permitted to sail out of the Port, and nobody compels him to give the Bank Guarantee.
Reliance also was placed on Ashok Arya v. M.V."Kapitan Mistos" and Board Of Trustees, Bombay Port v. Sriyansh Knitters . In M/S. Swastika Enterprises v. Board Of Trustees, Port Of Calcutta the Division Bench while dealing with the sale of sea vessel to recover charges due to Port and the procedure to be followed by authorities when no rules are in existence relating to the procedure of sale, observed at paras 30, 31 and 32 as hereunder:
We note that the Calcutta Port Authorities have not framed any rules as to how sales under Section 64 of the Major Port Trust Act, 1963 should be conducted. Therefore, it cannot be said that any rules has been violated by the Tender Committee in conducting the impugned sale. We are only concerned with the question whether the steps taken were unreasonable, unfair or arbitrary. We hold that the steps taken by the Tender Committee in conducting the sale were not unfair as opportunity was given to all the Tenderers up to second stage.
It is next to be considered whether the procedure followed in conducting the sale of the said vessel was unreasonable or arbitrary. In the absence of any Rules the Port authorities were of necessity required to lay down some procedure. The procedure which was followed may be stated to be ad hoc or improvised but the same cannot be said to be tainted with that degree of arbitrariness or unreasonableness which calls for interference by the Court. The procedure laid down gave a fair opportunity to all the tenderers and also ensured that a reasonably high price would be secured for the said vessel. The procedure satisfies both the tests and we are not inclined to interfere with the same.
We are unable to accept the contention of the respondent No.5 that in holding a sale under Section 64 of the Major Port Trust Act, 1963 the Port authorities were not acting as a Government instrumentality. The powers under which the sale was sought to be effected were statutory powers and the Calcutta Port Authority, which is indisputably a Government authority, was exercising statutory powers. Therefore, the principles laid down by the Supreme Court in the case of International Airport Authority and the other decisions noted hereinabove, must be said to be applicable.
Section 230 of the Indian Contract Act had been referred to in the decision of the Apex Court at para 8. Section 230 of the Indian Contract Act reads as hereunder:
Agent cannot personally enforce, nor be bound by, contracts on behalf of principal:- In the absence of any contract to that effect, an agent cannot personally enforce contract entered into by him on behalf of his principal, nor is he personally bound by them. Presumption of contract to contrary:- Such a contract shall be presumed to exist in the following cases:
1) where the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad;
2) where the agent does not disclose the name of his principal;
3) where the principal, though disclosed, cannot be sued.
The same contentions had been advanced before this Court by the respective Counsel - the learned senior Counsel representing appellant relying upon the provisions of the Indian Contract Act and on the contrary the Counsel representing the first respondent/defendant relying upon the regulations and contending that in the light of Section 123 read with Regulations framed by the Visakhapatnam Port Trust Authority, the shipping agent also is liable. Ex.A.34 had been strongly relied upon by the Counsel representing by the 1st respondent- defendant. The Counsel representing appellant made an attempt to distinguish the applicability of this decision on the ground that there is no specific undertaking by the Agent in the present case. On a careful analysis of Ex.A.10, Ex.A.34 and also the Regulations governing the field and the ratio laid down by the Apex Court in Transworld Shipping Services (1 supra), this Court is of the considered opinion that the said decision being a binding decision on this Court, the ratio would be followed and the said decision cannot be distinguished in the light of the contentions advanced by the Counsel for the appellant. The decision in W.P.No.5732/1986 of this Court was placed before this Court wherein Ednasa Shipping Company v. Trustees, Visakhapatnam Port (W.P.No.3829/86) and Stonedale No.1 (Owners) v. Manchester Ship Canal Co. had been referred to wherein the House of Lords considered the Manchester Ship Canal Act 1897 and the relevant Regulations had been relied upon and Section 32 of the Indian Ports Act and Section 230 of the Indian Contract Act also had been referred to and a positive finding had been recorded relating to the liability of an Agent. In fact, almost all the relevant statutory provisions including the relevant provisions of the Constitution of India had been referred to by the learned Judge in the said decision. But however, inasmuch as this decision was said to have been carried by way of Writ Appeal, wherein the Writ Appeal was dismissed and it is also stated that the same had been carried to the Apex Court which had been already referred to supra, the views expressed by the learned Judge virtually had been confirmed even by the Apex Court. Further reliance was placed on Workington Harbour (4th supra) wherein the House of Lords had dealt with Harbour and Pilot and Compulsory Pilot and responsibility of ship owner and action by ship owner against Harbour Board for negligence and held as hereunder:
In 1931 the W.Harbour Board notified the maritime public, by means of an inset in the appropriate Admiralty chart and by means of notices to mariners, of the facilities afforded to shipping by their harbour on payment of dues and charges. From 1933 onwards, under the heading "Dredged Depths," the chart bore the words:
In the approach channel and turning basin within the peeked lines a depth of 4 1/2 ft. at the chart datum is maintained by dradging (1933)," which meant, in effect, that the depth of the channel was maintained at the level of the dock- sill. It was indicated that the channel was 250 feet wide. On October 19, 1941 s.s. Towerfield, having a draft of twenty-three feet forward and twenty-four feet aft, arrived off W. Harbour, and took on the compulsory. Trinity House Pilot. High water was at 11.8 a.m., producing a predicted depth of thirty feet, one inch, at the dock sill. The pilot, after boarding the vessel, received a message from the harbour-master that the harbour tug was not available to assist in bringing the Towerfield into the dock, but the pilot decided nevertheless to bring her in. At 11.10 a.m., the Towerfield crossed the bar, steamed up the channel at three knots, and, after going about four hundred yards, grounded on the north side of the channel and subsequently broke her back. It was apparent that neither the advertised depth nor the advertised width of the channel had been maintained. The ship owners claimed damages from the harbour board in respect of (i) breach of the board's duty imposed by statute and at common law to take reasonable precautions that the approaches to the port were safe or to give warning that no such care had been exercised, and (ii) breach of contract or warranty that the condition of the harbour was in accordance with the Admiralty chart. The harbour board counterclaimed for damage to the harbour on the ground that it was due to the negligence of those in charge of the Towerfield, and also under the Harbours, Docks, and Piers Clauses Act, 1847, Section 74. The harbour board had given no information either to the ship owners or the pilot as to the state of the channel at the place where the Towerfield went around (which was within the channel as marked by the line of the northern dredging marks), nor had dredging been carried on continuously in the channel. The Pilotage Act, 1913, Section 15, provides: "(1) Notwithstanding anything in any public or local Act, the owner or master of a vessel navigating under circumstances in which pilotage is compulsory shall be answerable for any loss or damage caused by the vessel or by any fault of the navigation of the vessel in the same manner as he would if pilotage were not compulsory.
The House found that the harbour board were negligent in not fulfilling their obligations by sounding and dredging and in not ensuring that the pilot and master were warned of the state of the channel, and that the pilot was guilty of negligent navigation. On the questions of liability:
HELD: (i) Section15 (1) applied to the claim by the shipowners, whether it was in tort for negligence or for breach of contract between the harbour board and the shipowners; the word "answerable" in the sub-section meant "responsible," and (Lord Oaksey dissenting) the shipowners were responsible under that section for the faulty navigation of the pilot, and, consequently, for the damage sustained by the ship as well as for the damage to the harbour; but, as the harbour board were also negligent, neither could recover from the other.
(ii) on the true construction of Section 74 of the Act of 1847, the shipowners were liable for damage caused by their ship to the harbour works notwithstanding the contributory negligence of the harbour board, but the damages would be limited that the damage directly caused the works (which was conceded), and would not include, for instance, loss of revenue."
In fact, The Mostyn ([1928] A.C.57) was applied and Det Forenede Dampskibs Selskab v. Barry Ry.Co. ([1919) LI.L.R.658) was criticized and the Order of the Court of Appeal ([1948] 2 All E.R.736) was varied. The House of Lords, in fact, had referred to the undernoted decisions in the said decision:
1) The Eurymedon, [1039] P.41; 107 L.J.P.81; 158 L.T.445; sub nom., Corstar Owners v. Eurymedon Owners, The Eurymedon [1938 1 All E.R. 122; Digest Supp.
2) Boy Andrew (Owners) Ltd., v. St.Rognvald (Owners) Ltd., [1948] A.C.140; [1948] L.J.R. 768; sub nom., Admiralty Comrs. V. North of Scotland and Orkney and Shetland Steam Navigation Co., Ltd., [1947] 2 All E.R., 350; 2nd Digest Supp. 3) Dennis v. Tovell, (1872) L.R. 8 Q.B.10; 42 L.J.M.C. 33; 27 L.T. 482; 37 J.P. 263; 41 Digest 974, 8641.
4) River Wear Comrs., v. Adamson (1877), 2 App.Cas. 743; 47 L.J.Q.B.193; 37 L.T. 543; 42 J.P. 244; affg., (1876), 1 Q.B.D. 546; 46 L.J.Q.B.83; 45 L.T. 118; 41 digest 974, 8643.
5) Great Western Ry.Co. v. Mostyn (Owners), The Mostyn, [1928] A.C. 57; 97 L.J.P.8; 138 L.T. 403; 41 digest 974, 8645
6) Det Forenede Damopskibs Selskab v. Barry Ry.Co., [1919] LI.L.R. 658.
7) Anchor Line v. Dundee Harbour Trustees, The Circassia, Ellerman Lines v. Dundee Harbour Trustees, The City of Naples, 1922 S.C. (H.L.) 79; 58 Sc.L.R. 440; [1922] S.L.T. 137; 41 Digest 970 t.
8) Williams v. Swansea Harbour Trustees, (1863), 14 C.B.N.S. 845; 143 E.R. 675; 41 digest 979, 8676.
9) Bede S.S.Co. v. River Wear Comrs., (1907) 1 K.B. 310; 76 L.J.K.B. 434; 96 L.T. 370; 41 Digest 979, 8677
10) The Tactician, [1907] P.244; 76 L.J.P. 80; 97 L.T. 621; 41 Digest 902, 7951.
11) The Prinses Juliana, Esbjerb Owners v. Prinses Juliana Owners, [1936] 1 All E.R., 685; [1936] P.139; 105 L.J.P. 58; 155 L.T. 261; Digest Supp.
12) Thom v. Hutchinson (J. & P.) Ltd., 1925 S.C.386; 41 digest 911 q. 13) The Adam W.Spies, (1901), 70 L.J.P. 25; 41 Digest 683, 5124
14) Davies (Davis) v. Mann, (1842) 10 M. & W. 546; 12 L.J.Ex.10; 7 J.P. 53; 152 E.R. 588; 2 digest 232, 214.
15) Davenport v. R., (1877), 3 App.Cas., 115; 47 L.J.P.C.8; 37 L.T. 727; 81 Digest 472, 6195.
16) Admiralty Comrs., v. S.S.Volute [1922] 1 A.C. 129; 91 L.J.P. 38; 126 L.T.425; 41 Digest 780, 6417.
In G.W.R.'s case (3rd supra) the House of Lords while dealing with damage to dock works by ships and where there was no negligence by ship owner or his servants and the liability of ship owner in the context of Harbours, Docks, and Piers Clauses Act, 1847, observed:
By the Harbours, Docks and Piers Clauses Act, 1847, Section 74: The owner of every vessel...shall be answerable to the undertakers for any damage done by such vessel...or by any person employed about the same, to the harbour, dock, or pier, or the quays or works connected therewith, and the master or person having the charge of such vessel...through whose willful act or negligence any such damage is done shall also be liable to make good the same...." The respondents vessel, in entering the appellants' docks, dragged her anchor which became engaged with an electrical cable laid at the bottom of the dock entrance, doing damage. There was no negligence on the part of the shipowners or those employed about the vessel.
Further, per Viscount Haldane, Lord Shaw, and Lord Blanesburgh, however, Viscount Dunedin and Lord Phillimore dissenting, held "liability of a shipowner under Section 47 was established on proof of damage done by the ship to a dock or works connected therewith, and without proof of negligence or breach of duty, and, the hereunder:-, the respondents were liable for the damage done to the cables." Per Lord Phillimore it was observed that if there was negligence and that negligence caused damage, I doubt whether it would be a defence to say that the damage was not one naturally to be expected. The under noted cases had been referred to in the said decision:
1) River Wear Comrs., v. Adamson (1876), 1 Q.B.D. 546; 46 L.J.Q.B.83; 35 L.T. 118; 24 W.R. 872, C.A.; affirmed (1877), 2 App.Cas.743; 47 L.J.Q.B.193; 37 L.T.543; 42 J.P.244; 26 W.R.217; 3 Asp.M.L.C.521, H.L.; 36 Digest (Repl.)166, 890.
2) Dennis v. Tovell (1872) L.R. 8 Q.B. 10; 42 L.J.M.C.83; 27 L.T.482; 37 J.P.263; 21 W.R.170; 2 Asp.M.L.C.402, n.; 36 Digest (Repl)166, 888.
3) Arrow Shipping Co.Ltd. v. Type Improvement Comrs., The Crystal, [1894] A.C. 508; 63 L.J.P. 146; 71 L.T.346; 10 T.L.R.551; 7 Asp.M.L.C513; 6.R.258, H.L.; 41 Digest 822, 6807.
4) Paradine v. Jane (1647), Aleysn, 26; Statutory.47; 82 E.R.897; 12 Digest (Repl.) 417, 3236.
5) Fletcher v. Rylands (1866), L.R. 1 Exch.265; 35 L.J.Ex.154, affirmed sub nom. Rylands v. fletcher (1868), L.R. 3 H.L., 330; 37 L.J.Ex.161; 19 L.T. 220; 33 J.P.70, H.L., 36 Digest (Repl.) 282, 334.
6) Nichols v. Mursland (1876), 2 Ex.D.1; 46 L.J.Q.B.174; 35 L.T.725; 41 J.P.500; 25 W.R.173, C.A.; 36 Digest (Repl.)165, 880.
7) The Merie (1874), 31 L.T.447; 2 Asp.M.L.C.402; 36 Digest (Repl.) 166, 880.
These decisions are no doubt foreign Judgments, but however, for the limited purpose of fastening the negligence and also in the light of some similarity between the Indian Legislative provisions and the corresponding provisions of the relevant Acts specified in the said decisions, these decisions had been relied upon by the trial Court. It is needless to say that such decisions and the principles laid down therein may be looked into though in strict sense the ratio laid down may not operate as binding precedent on this Court, these being foreign Judgments. However, for the limited purpose of deciding the aspect of negligence, these decisions in the context of Section 15 of the Pilotage Act and 74 of the Harbours, Docks and Piers Clauses Act, 1847 had been referred to and relied upon. Hence, the approach adopted by the trial Court in this regard also cannot be found fault.
22. The evidence of P.W.1, P.W.2 and D.Ws. 1 to 6 already had been referred to supra in detail. The voluminous documentary evidence relied upon also had been specified above. Ex.A.12 dt.27-10-1976 reads as hereunder:
Grams: "PORTUST"
Telex: 049/235 Phone: 4841-207 VISAKHAPATNAM -1 (ANDHRA PRADESH) DEPUTY CONSERVATOR, VISAKHAPATNAM PORT TRUST Date: 27-10-1976 No.23122 To The Master, m.v. "LALINDA"
Visakhapatnam Port.
Dear sir, Sub:- Damages caused to the Dredger Lay-by Jetty and the Port Tugs "SOURI" and "DOLPHIN" and their equipment.
- - - - - - -
On 26-10-1976 at about 1400 hours, your vessel while coming into the Port had collided with the Dredger Lay-by Jetty and the tugs "SOURI" and "DOLPHIN" and their equipment causing extensive damage to them due to the wrong movements executed on your engines, dis-obeying the clear instructions of the Port Pilot.
So, you are held responsible for the above damages, provisionally estimated at Rs.16 lakhs, caused to the above said Port property under Regulation 42 of the Visakhapatnam Port Dock egulations, 1967 (1971 Edition).
You are hereby requested to deposit the said amount of Rs.16 lakhs immediately with the F.A. & C.A.O./Visakhapatnam Port Trust, failing which the Port Trust reserves the right to detain your vessel in the Port.
Yours faithfully, Sd/-
DY.CONSERVATOR By Regd.Post with Ack. Due Copy to owners, M/s.Lalinda Shipping Corpn., Singapore Copy to Managing Agents, M/s,.EDNASA Shipping Co.Ltd., 1536, Union House, HONGKONDA.
Copy to Agents, M/s.J.M.Baxi & Co., Visakhapatnam.
23. P.W.1 is only a Power of Attorney Holder and he was not present at the time of the accident. So his evidence may not be helpful to establish whether the accident, in fact, had occurred due to the negligence on the part of the Pilot or not. P.W.2 simply deposed that his services were obtained for the purpose of monitoring the work involved in the reconstruction of the Jetty. Hence, P.W.2's evidence also is not helpful on the aspect of Board Pilot's negligence on the fateful day of the accident. D.W.1 deposed in detail that a pilot being provided to the ship which is coming to the Harbour or outgoing from the Harbour and they will meet the vessel at the pilotage ground. The said area is 2 nautical miles from the harbour from the entrance channel. They met the vessel on pilotage or through a pilot launch and they board the ship and the ship will be brought to the harbour. The Master of the vessel is in-charge for the said vessel till it is berthed. Because, due to the familiarity with the local conditions of the Port the Pilot will advise the master to bring the said ship to the berthing. D.W.1 has categorically stated that the Master has the last word in the matter of navigation. It is in his evidence that he was on duty on 26-10-1976 and he was ordered to bring the vessel Lalinda inside the harbour. On 26-10-76 he boarded the vessel Lalinda at 13.03 hurs. The Dredger lay-By-Jetty is beyond the inner harbour turning basin and at the entrance of the North Western Army. In 1976, they were having Inner Harbour. He further deposed that after he boarded the ship, he went to bridge where the Chief Officer of the ship was there. He gave him all the instructions regarding the berthing and keeping both star board and port anchors ready for letting go. He also gave instructions securing forward tug. After exchange of greeting with the Master of the said ship who came on the bridge he again explained about the procedure and also about the keeping both star board and port anchors ready for letting go. Then the Captain of the said ship passed on the said instruction to the Chief Officer and the 2nd Officer of the said vessel. Then they weighed anchor and approached fairway buoy and stopped the engines. It was 13.55 hours by the time they came to the fair way buoy, and they stopped the engines at 13.56 hours. When the engines were stopped, the ship was not steering and thereafter they use the engines for steering purpose. The forward tug was Souri and after tug was Dolphin. The forward tug was the two forward and after tug was secured aft. At 14.11 1/2 hours they passed the dry dock buoy. Then he stopped the engines. At 14.13 hours, when the ship was near the Sonametta buoy he gave half Astern on the engines. About 1/3rd of the ship was passed on Sonametta buoy. There was a slight head way. Half eastern was given on the engines and the ship developed the head way. Normally, if the forward tug gives tight tope then the ship develops head way. When the ship developed head way at 14.14 hours, he ordered for full astern on the engines and at the same time he asked to let go the star board anchor. For some reason or the other the Chief Officer could not drop the star board anchor. All the instructions were given to the Master of the vessel. When the star board anchor did not drop, he instructed the master to let go the Port anchor at 14.14 1/2 hours. He instructed the after tug Dolphin to come in a straight line and pull the ship in the reverse direction, and also at the same time he ordered the forward tug Souri to pull the ship's bow to star board. After he paid on and the same was conveyed to the Chief Officer, they could not hold on. This could be due to brakes burning and four shackles have run out. At 14.15 hours, the tug's rope had parted. There were dredger pansy, oil barge and T.S.Mekale and the ship was definitely going to hit them and the forward tug would have been crushed. At 14.15 hours the ship hit the dredger lay bye jetty. It is also the evidence of D.W.1 that he informed the master that the engines might have been going ahead instead of Astern. That the ship was going ahead was confirmed by the after tug master, and the Deck Sarang and also the relieving crew of the Dolphin. The contention of the defendant's Counsel is that it is clear from the evidence of D.W.1 that he asked the Chief Officer of the vessel to let go star board anchor, but the Chief Officer could not drop the star board anchor and then he ordered the Master to let go Port Anchor. But he could not do so. Thereafter the tug ropes parted. So the contention of the defendant's Counsel is that the above evidence of D.W.1 would go to show that D.W.1 who is pilot in the plaintiff's vessel at the time of the relevant period has not given any wrong instructions. Even the said witness was not cross-examined eliciting that wrong are the instructions, that were given by him to the master and the Chief Officer and due to such wrong directions the accident was occurred. But a suggestion was made to D.W.1 that he has taken circuitry route and hence the accident was occurred. But about the topography and also other hidden things in the sea he would be the best person to decide the route. Apart from it, the defendant examined one M.Satyam, as D.W.4 who is working as Tug Master in Visakhapatnam Port Trust. As per his evidence, he is the Master of the tug, Dolphin on 26-10-76 when the ship Lalinda enters into the Port of Visakhapatnam, he was the master of the tug Dolphin. They follow the instructions of the pilot of the ship. When the said ship came to the Sonemetta the said ship was stopped. But the vessel did not stop and it was moving in spite of using stern and it is going forward. Then through Walkie Talkie, he gave instructions to the Pilot Officer that the vessel is moving forward. Then the Pilot Officer informed them even on commission of stern the ship is not stopped and it is going forward and due to that movement of the ship, it went and dashed against the jetty lay by. The evidence of D.W.5 also had been appreciated at length. Ex.B.10 - the statement of the Master recorded by the Enquiry Officer also had been relied upon and ultimately a finding had been recorded relating to the negligence. Hence, the findings recorded on the aspect of negligence, need no disturbance at the hands this Court.
24. Certain submissions were made that the defendant had not given publicity in respect of the tender for the repairs to the Jetty and M/s.AFCONS had been chosen without giving opportunity to similarly placed companies. No doubt, the evidence of P.W.2 had been relied upon and certain submissions were made that the cost incurred is fanciful and exaggerated and disproportionate to the alleged damage caused to the Jetty. P.W.2 also deposed that M/s.AFCONS is a reputed firm of Civil Engineering Contracts and under Ex.A.24, dt.8-2-78, the plaintiffs were informed that a contract was awarded to AFCONS and the work was commenced on 6-12-1977. Ex.A.44 is the copy of the Lawyer's notice issued by the plaintiffs to the defendant dt.10-1-78 under which the plaintiffs admitted that they were informed that the work was entrusted to M/s.AFCONS. D.W.2 is the Executive Engineer of the Port Trust who had deposed about the inspection, the damage caused, the estimations and other particulars and also submitting the report. He had deposed in relation to Ex.B.1, Ex.B.1-A, Ex.B.2 and Ex.B.3. Further D.W.3 deposed in detail about several of the facts and also relating to Ex.A.10. The evidence of the other witnesses also had been already discussed supra. The documentary evidence had been deposed in detail by the respective witnesses and the evidence of those witnesses already had been discussed at length. Ex.A.3, Ex.A.17, Ex.A.22, Ex.A.69, Ex.A.70, Ex.A.2, Ex.A.73, Ex.A.74, Ex.A.75 - the orders in the prior Writ Petitions and Writ Appeals also had been relied upon. In the light of the clear evidence of D.Ws. 1 to 6 and Ex.B.1 to Ex.B.19 in particular, coupled with Ex.A.10 and Ex.A.34 as well, findings had been recorded. The mere fact that an alternative remedy by way of suit is available under Section 131 of the Major Port Trusts Act, 1963, that doesn't mean that always necessarily the defendant should be driven to a suit. It is pertinent to note that the plaintiffs approached the Court praying for certain reliefs. It is true that normally, in a suit of this nature instituted by the plaintiffs, unless there is a counter claim, no positive reliefs as such can be granted in favour of the defendant.
25. Except these points no other points had been urged by the respective Counsel. Hence, the points argued in elaboration by both the Counsel had been decided in the light of the evidence available on record. The finding relating to the negligence being a finding of fact, especially, in the absence of any acceptable evidence on the part of the plaintiffs, since the evidence of P.Ws. 1 and 2 is of no help in this regard, the said findings are to be confirmed. Relating to the contention that the Agent - 3rd plaintiff - appellant is not liable, in the light of the decision of the Apex Court, referred to supra, especially in the light of the Ex.A.34, it cannot be said that the ratio in the said decision is not applicable to the facts of the present case. The principle laid down in the said decision is equally applicable to the present case as well and hence, this Court is bound to follow the binding precedent. The only other question left over is that in the facts and circumstances of the case, in the absence of a counter claim, whether liberty can be given for deduction of some amount. It is true that normally, in the absence of a counter claim, in a suit instituted by the plaintiffs, such positive liberty cannot be given in favour of the defendant. It is pertinent to note that in relation to a particular quantum, a positive relief of perpetual injunction had been prayed for and the said relief was granted for a portion of the amount and for the rest of the portion, the trial Court came to the conclusion that such relief cannot be granted. In the light of the other findings which had been recorded, the consequence would be the entitlement of the 1st respondent-defendant to that amount for which the relief of perpetual injunction had been negatived. Instead of driving the 1st respondent - defendant to yet another litigation, the trial Court thought it fit to make appropriate observations in this regard. This relief granted cannot be said to be totally a new relief but in a way this is consequential to the principal relief which had been prayed for and which was partly granted and partly disallowed by the trial Court. Though such positive direction of deduction normally may not be permissible inasmuch as it is only a resultant relief flowing out of the negativing of the part of the relief, this Court is of the considered opinion that in equity, it may not be just and proper to disturb the said finding also in this appeal. However, it is made clear that normally, in the absence of a specific counter claim, the defendant would not be entitled to such positive directions. With the above observation, the findings recorded by the trial Court are hereby confirmed. It is already made clear that on the other questions which had been argued in elaboration before the trial Court, since no contentions had been advanced, the said questions are not being dealt with in elaboration and the said findings are hereby confirmed.
26. Point No.4:- In the light of the findings recorded above, the appeal being devoid of merit, the same shall stand dismissed. However, in the peculiarity of the facts, the parties to bear their own costs.