Kerala High Court
K.B. Jacob And Sons, Stevedors, Cochin vs The Shipping Corporation Of India Ltd., ... on 8 January, 1990
Equivalent citations: AIR1990KER256, AIR 1990 KERALA 256, (1990) 1 TAC 385, (1990) 3 CURCC 415, (1990) 1 ACC 397, (1991) 1 CIVLJ 343
JUDGMENT P.K. Shamsuddin, J.
1. Defendant is the appellant. Suit was for damages and short delivery of goods.
2. Plaintiff is a Shipping Company engaged in the carriage of goods by sea. In its vessel s. s. Vishwa Raksha, it brought among other cargo, a consignment of steel sheets to the Port of Cochin for the Cochin Refineries Ltd. The vessel arrived at Cochin on 11-10-1967. The defendant was engaged as stevedores for discharge of the said cargo. Discharge operation was completed on 18-10-1967. There were 217 bundles of steel sheets for discharge. The mode of discharge was that each bundle would be tied to a wire sling, lifted from the hatch and discharged to the lighter moored by the side of the ship. For the above purpose, the wire sling with a circumference of 1 3/4" was used. In the course of discharge of the last bundle to the lighter the sling broke and the bundle fell into the lighter. As a result of the impact, the bottom of the lighter gave way and 22 bundles of steel sheets were irrecoverably lost under water. The salvage operation conducted by Port Authorities did not succeed.
3. The plaintiff alleged that the cargo was lost due to the negligence of the defendant in that it used wire sling of the circumference of 1 3/4" instead of 2 1/2 inches for lifting the cargo, and that therefore the defendant was liable to make good the loss. The plaintiff had to pay to the consignee for short delivery of the goods occasioned which was estimated at Rs. 54,185,31, but the plaintiff limited its claim to Rs. 24,000/- for which the plaintiff settled the claim with the under writers on 25-6-1970. The suit was for recovery of this amount, besides Rs. 209.67 paid by the plaintiff to the Cochin Port Trust as charges for salvage operations.
4. The defendant filed written statement contending that they were not liable to compensate the plaintiff as the payment was made to the plaintiff long after liability was extinguished by operation of law. They also denied the averment that the defendant and their employees were negligent in discharging the cargo. According to them, they used proper and sound wire slings and other equipments for the purpose of discharging the cargo and while the bundle of sheets were being lifted and brought out of the vessel and lowered by means of wire sling of circumference of 1 3/4" it was suddenly noticed that the lighter which was waiting to receive the bundle was unexpectedly shifted by the lighterman and its crew. This shifting of the lighter could not have been foreseen by the defendants. As the sling with the bundle already came out of the vessel and was being lowered into the lighter the men handling the sling were compelled to keep the load suspended in air until the lighter was again safely placed in position for receiving the load. While so the sling suddenly twisted and as a result of that, the bundle fell into the boat. The averment that the liability of the plaintiff was kept alive by acknowledgement was also denied. They were not aware of the payment of Rs. 209.67 to the Cochin Port Trust by the plaintiff and the suit was liable to be dismissed.
5. Plaintiff filed a replication reiterating its contentions in the plaint.
6. The trial Court held that the suit was not barred by limitation or extinguishment. According to the lower Court what was to be considered was the question whether the defendant was answerable to the plaintiff to the loss caused to the cargo and that liability would subsist for a period of 3 years. It also held that the rights and liabilities of the plaintiff and defendants were governed by the terms contained in Ext. A30 as regards stevedoring operation agreed to be carried on by the defendant and the provisions of the Carriage of Goods by Sea Act had no application and that the suit filed within 3 years was well within the period of limitation. Accordingly, the lower Court passed a decree in favour of the plaintiff for recovery of a sum of Rs. 24,000/- by way of damages and an amount of Rs. 209.67 towards the amount which the plaintiff had to pay to the Cochin Port Trust for salvage operations from the defendant.
7. In this appeal, learned counsel for the appellant vehemently challenged the finding of the trial Court. According to learned counsel, the defendant's liability to reimburse the plaintiff for the loss sustained by the consignor or consignee depended upon the right of the consignor and consignee or their Insurance Agency to recover the damages for the loss sustained. In this connection, learned counsel invited my attention to Article 3(6) of the Schedule to the Carriage of Goods by Sea Act, which lays down that in any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered. Admittedly in the instant case the suit was filed beyond the period of one year.
8. Dealing with the scope of Article 3(6) of the Schedule to Carriage of Goods by Sea Act, the Supreme Court in the decision in East and West Steamship Co. Georgetown v. Ramalingam Chettiar, AIR 1960 SC 1058 said:
"25. On the next question whether this clause prescribes only a rule of limitation or provides for the extinction of a right to compensation, it will be observed that the Bombay High Court has not discussed it at all, apparently because on the facts of the case before it, it would have mattered little whether the provision was one of limitation or of extinction of right. The question is however of some importance in the facts of the Madras case. For if the provision is one of limitation there would be some scope for argument in the facts of that case that the period was extended by acknowledgements of liability within the meaning of Article 19 of the Limitation Act. The question we have to decide is whether in saying that the ship or the carrier will be "discharged from liability", only the remedy of the shipper or the consignee was being barred or the right was also being terminated. It is useful to remember in this connection the international character of these rules, as has been already emphasised above. Rules of limitation are likely to vary from country to country. Provisions for extension of periods prescribed for limitation would similarly vary. We should be slow therefore to put on the word "discharged from liability" an interpretation which would produce results varying in position uncertain for both the shipper and the shipowner. Quite apart from this consideration, however, we think that the ordinary grammatical sense of "discharged from liability" does not connote "free from the remedy as regards liability", but are more apt to mean a total extinction of the liability following upon an extinction of the right..... It is hardly necessary to add that once the liability is extinguished under this clause, there is no scope of any acknowledgment of liability thereafter." This ruling is approved by the Supreme Court in a later ruling in Prem Prakash v. The Punjab University, AIR 1972 SC 1408. In Union of India v. Scindia steam Navigation Co. Ltd., 1973 Ker LT 952 : (AIR 1974 Ker 136) a Division Bench of this Court also held that if a suit was not brought within one year, the carrier and the ship would be discharged from all liability in respect of loss or damage and therefore there is no scope for exclusion of period provided in Section 14 of the Limitation Act, in view of the language of Clause (3) in paragraph 6 of Article III of the Schedule to the Act. In Konsumex v. Anand and Co., AIR 1981 Cal 298 the Calcutta High Court has pointed out that the operation of Rule 6 does not result merely in the extinction of the remedy against the carrier by a claimant but absolves the carrier from any liability, and once such liability is totally extinguished there is no scope for any subsequent acknowledgment thereof. The same view has been expressed in the decisions in The Minerals & Metals Trading Corpn. of India Ltd. v. The Shipping Corpn. of India Ltd., AIR 1987 Cal 276.
9. The plaintiff has pleaded acknowledgment in the plaint. In the light of the principles enunciated in the above rulings such a plea is not available to the plaintiff.
10. Learned counsel for the respondent however attempted to get over this hurdle by contending that there was a distinct contract between the stevedores and the shipping company according to which the shipping company would be entitled to recover any damages sustained by them in respect of any service rendered by the stevedores, that contract was independent of liability created by the Carriage of Goods by Sea Act and that therefore the provisions contained in the Carriage of goods by Sea Act would not come into picture. According to him, the plaintiff had a period of 3 years to file a suit for damages based on this contract and that so construed the suit was well within time. I find it difficult to accept the contention. There is no pleading in the plaint that there was a written or implied contract between the plaintiff and the defendant to reimburse the plaintiff for any loss sustained by it on account of the negligence on the part of the defendant or their employees. No such agreement was filed and no evidence regarding any such contract was adduced by the plaintiff. Learned counsel for the respondent however relied on Ext. A30 a letter sent by the defendant to the plaintiff Shipping Corporation of India Ltd. Bombay, stating that they were submitting the prevailing stevedoring rate in the Part of Cochin, that the rate, was negotiated in 1967 between the Shipping Sub Committee representing the Shipping interest and the United Stevedores Association, that the rate was to be effective till 31-3-1969, that to negotiate a fresh rate they were waiting fpr the final Wage Board report, that as the report was in its final stage, the Shipping Sub Committee and the Stevedores Association were agreed to maintain the status quo till a new rate was negotiated and that as soon as the new rate was negotiated, they would forward the same for acceptance. Along with the covering letter, pages 5 and 6 of the terms also were produced. The learned counsel placed great reliance on the conditions attached to Stevedoring Schedule which was at page 5. Clause (d) therein states that Stevedores accept liability for damage arising out of or in the consequence of the negligence on the part of the Stevedores or any of their employees to any part of property of the Ship or any property belonging to Cochin Port Authorities or for any loss or damage to cargo to which the line may be held liable or any accident involving the ship's crew and/or officers, except through defect in the ship's gear. It also provides that Stevedore will not be responsible for any accident involving other labour or persons except ship's officers and crew. Learned counsel on the basis of these terms, argued that this clause spells out the contract between the plaintiff and defendant. This, according to learned counsel is an independent contract and has no bearing whatsoever to the damage arising under the Carriage of Goods by Sea Act. In the instant case, no loss or damage was caused to any property of the ship. With regard to cargo, it was specifically provided in Ext. A30 that Stevedore would be liable only for any damage to which the line may be held liable. Ext. A30 came into existence long after the accident and the plaintiff cannot rely on that document to prove an independent contract. Even assuming that the terms sent along with Ext. A30 are applicable to the present case, if only the line was held liable to make the payment that the defendant had an obligation to reimburse the plaintiff for the loss of cargo. The obligation of the defendant is clearly dependent on the obligation of the plaintiff to make good the loss or shortage of cargo to consignor or consignee under the Carriage of Goods by Sea Act and once such obligation was extinguished or discharged by operation of law, it is not open to the plaintiff to contend that the defendant was liable since the plaintiff made the payment and settled the matter. If the plaintiff has no legal obligation to pay compensation, then the plaintiff cannot shift the burden to the defendant by making voluntary payment. In fact, in this case, as pointed out by me earlier, no such contract was pleaded or substantiated. For the above reasons I hold that the plaintiff is not entitled to any relief against the defendant.
11. Learned counsel for the appellant contended that there is no clear evidence in the case to show that it was due to the negligence of the plaintiff that the accident took place and the loss and damage occurred. Learned counsel for respondent, however relied on the evidence of P.W. 2, Ext. A13 report of the Inspector, Dock Safety, Cochin, and Ext. X2 report of accident sent by the defendant to prove that the loss had occurred as a result of negligence of the employees of the defendant. In Clause 7 of Ext. X2, the cause of accident was mentioned as follows :
"While discharging steel plate wire sling snapped and the Cargo fell into the lighter and sank. No personal injury to anyone. The snapped wire was the one provided for lifting the bundle to enable the workers to put the proper wire. But instead of putting another wire provided for discharging the worker heaved the cargo with the same wire. If the wire was changed after lifting this occurrence would have not taken place."
In the written statement the defendant contended that during the operation of discharge, when the lost bundle of steel sheets was lowered from the vessel the lighter which was waiting to receive the bundle was found shifted and the defendants had to keep the bundle in the air for some time which resulted in the twisting of the sling and the con-senquent breakage. The lower Court, stated that such a contention was raised for the first time in the written statement. That observation does not appear to be correct. Ext. X7 is a letter dated 8th December 1967 sent by the defendant to the Inspector of Dock Safety, Mattancherry Wharf stating that in anxiety to send the report in time they made a mistake in Form XII against item No. 7 and that the report was sent without making proper enquiry as the workers concerned were not then available, and that on enquiry they under-
stood that the reason shown in their Form XII was not correct. It also stated that the reason for the accident according to the persons on the spot was as follows :--
"While a sling load of steel sheet bundles (one bundle weighing approximately 1.5 tonnes) the sling had to be kept in the air for a long time because the lighter men were shifting the lighter. To avoid the sling rest in the air for a long time the signaller lowered the sling but unfortunately the same hit on the main deck (which was below the boat deck where from the signaller was commanding) and the sling load started twisting and swinging and due to this jerked twist the wire snapped, and the contents fell into the lighter."
In Ext. X7, the defendant also made a request to amend the Form XII accordingly. In view of this letter, the lower Court was not justified in pinning down the defendant to the alleged admission in item No. 7 of Ext. X2. The lower Court has not adverted to Ext. X7 and proceeded on the basis that 1 3/4" wire snotter was used instead of 2 1/2 wire sling for lowering bundle steel sheets weighing 1.59 M. tonnes and while it was being done the contents fell from a height of 25 into the lighter and that the said stee! bundle as well as the other bundles which were already discharged in the lighter were lost as the bottom of the boat gave way. Ext. A 7 log entry also states so. PW2 was the Assistant Director in the Directorate General of Factory Advice Service, Central Labour Institute Building, Sion, Bombay, He stated that at the time of occurrence he was the Inspector under the Indian Dock Labour Board Act 1934, at the Port of Cochin, that on the date of occurrence of the accident he was shown wire rope with a circumference of 1 1/2" alleged to have been used for slinging sheet metal bundles out of the ship "Vishva Raksha" into a lighter or barge which was algonside that vessel, and found the wire rope broken. He deposed that a wire rope of 1 1/2" circumference should not be used for a load of more than about 1 1/2 tonnes. He also deposed that if the wire rope was of 1 1/2" circumference, and if it were subjected to a load of 3 tonnes it would amount to subjecting the wire rope to a stress more than the safety level. He stated that a wire rope used for loading and unloading operations would normally break for three reasons : (i) due to its patent or visible defects; (ii) due to subjecting it to a stress which is more than the safe permissible load of the wire rope and (iii) due to indeterminate causes such as shock loads or jerks coming on the wire rope. He rules out any patent and visible defect and mentioned that the accident must have occurred due to the second reason.
12. On the other hand, learned counsel for the appellant relied on the evidence of D. Ws. 1 to 4. D. W. 2 was the Mechanical Superintendent of Cochin Port and he was competent to inspect the wire slings used for loading and unloading cargo and to issue certificate. He stated that Exts. B2 to B4 are the certificates issued by him. Ext. B3 shows that in the case of rope of l 1/2" (5/8" dia.) with six number of strands, the load to which the sample broke was 11.5 tonnes. It also shows that the safe working load was 1.91 tonnes.
Similarly Ext. B4 shows that the safe working load of wire rope with a circumference of 2 3/8"
would be 2.85 tonnes and the load at which the sample broke was 17.1 tonnes. D.W. 2 deposed that where the wire ropes with 1 3/4 circumference is used it is not likely to break, if a load of 1.5 or 1.59 tonnes was lifted.
According to the evidence, the load of the bundle which was lifted was 1.59 M. tonnes.
D.W. 1 is a Foreman of the ship. He has explained the circumstances under which the accident took place. According to him, when the last bundle was taken the boat was not near the ship and there was heavy storm and therefore the load taken began to twist and it was in those circumstances that the incident took place, He also stated that it was according to the signal given by Krishnakutty who is an employee of the Dock Labour Board that the bundle was lifted. D.W. 3 is Tally Clerk of the Dock Labour Board. His evidence also supports the case of the defendant to a considerable extent. The lower court has not adverted to the evidence of D.Ws, 1 and 3, It has also not examined the evidence of D. W. 2 in detail. In view of the admission of D.W. 2 that he did not see the particular sling rope which was used and that therefore he could not definitely say what would be safe working load of 1 3/4" wire rope of circumference the lower Court rejected his evidence as useless. It has to be noticed that the certificate issued by P,W. 2 speaks of wire rope of circumference of 1 1/2" as the rope examined by him. All parties agree and the documents produced also prove that it was the wire rope of circumference of 1 3/4" that was used. In his evidence also P.W. 2 proceeds on the basis that it was wire rope of circumference of 1 1/2" that was used. This fact has not been adverted to by the lower Court. Even according to P.W. 2 the work load would be much higher than the safe work load certified by him. It would be almost 6 or five times. Therefore even if wire rope of circumference of 1 3/4" is used for lifting a load of 1.59 M. Tonnes, normally no breakage would occur.
13. Foregoing discussion would show that the evidence was not sufficient to come to the conclusion that it was due to the usage of 1 3/4" wire rope that the accident took place. I would have remanded the matter for a fresh finding after giving the parties an opportunity to adduce fresh evidence on this aspect. But in the view that I have taken that the suit is not maintainable, there is no necessity of remanding the case for that purpose.
In the result, the appeal is allowed, the judgment and decree of the court below are set aside and the suit is dismissed. The parties are directed to suffer their respective costs.