Bombay High Court
Mahajan Silk Mills Pvt. Ltd. vs M.V. Msc Elena, A Motor Ship Flying The ... on 10 April, 2000
Equivalent citations: 2000(3)BOMCR841, (2000)2BOMLR513
Author: F.I. Rebello
Bench: F.I. Rebello
ORDER F.I. Rebello, J.
1. The defendants who have been served have not yet filed their written statement. However, by the present Notice of Motion they have prayed that the suit be dismissed as barred under the provisions of Article III Rule 6 of the Indian Carriage of Goods by Sea Act, 1925, They have further prayed that consequent to dismissal, the Prothonotary and Senior Master be directed to return the original Bank Guarantee dated 3rd May, 1999.
2. Before considering the Notice of Motion, a few relevant facts may be adverted to. The Bill of Lading was issued at Mumbai on 23rd June, 1997. The ship arrived at the Port of Felixstowe on or about 19th July, 1997. The goods were delivered to the Consignees on 6th August, 1997. There are further averments that only a part of the goods were delivered by the Agents of the defendants through the Consignees and the balance of the consignment remained secured in a warehouse. The present suit is filed on 30th March, 1999. The suit is based on the ground that the original sole defendant and/ or her agent wrongfully and fraudulently delivered the consignment without production of the original documents. Fraud was intentionally suppressed from the plaintiffs and was made known to the plaintiffs only on 19th June, 1998 when the plaintiffs came to know that the consignment had been released without production or surrender of Bills of Lading. It is further pleaded that without prejudice to the said contention, the defendants vessel has been out of jurisdiction entitling the plaintiffs to exclude the said period. It is therefore, pleaded that the suit is in time. Without prejudice, it is contended and by way of abundant caution, the plaintiffs seek leave under Article III, Rule 6 of the Indian Carriage of Goods by Sea Act, 1925, although it is the case of the plaintiffs that the defendants are not entitled to invoke and avail of the said benefit.
The defendants have relied on various documents. One such document is dated 18th June, 1998. By the said letter sent to the plaintiffs, the plaintiffs were informed that the Consignees had made some payments in respect of a part of the consignment and had taken delivery and the balance remained in secure warehouse. Similar is a letter of 27th June, 1998. The plaintiffs were informed that the goods were still under their control. The plaintiffs were asked to discuss the matter with the Consignees and agree to the payment of balance amount and/or advise to reship the goods to JNP or to any new buyer, if rejected by the Consignees.
3. At the hearing of the Notice of Motion on behalf of the defendants, it is contended that considering the date of the Bill of Lading and the date when the ship arrived at the Port of Felixstowe, the suit as filed on 3rd March, 1999 has, to be dismissed pursuant to Clause 6 of Article III of the Indian Carriage of Goods by Sea Act, 1925. Secondly, it is contended that even under the terms of the contract the suit ought to have been filed within one year after the delivery of the goods or the date when the goods should have been delivered. It is submitted that the suit having been instituted more than one year after delivery of the goods or the date when the goods should have been delivered, the defendants are discharged from all liabilities in respect of any loss or damages occasioned to the plaintiffs.
On the other hand on behalf of the defendants it is contented that Clause 6 of Article III would not be attracted. It is contented that the said clause only applies during the period when goods are shipped and when they are discharged. Any claim after discharge is not covered by the said clause. In the instant case, it is pointed out that the cause of action is based on the ground that the defendants and/or their Agents have wrongfully released the goods to the Consignee without there being proper documents. In these circumstances, it is pointed out that it is the ordinary law of limitation that would apply and consequently the suit as filed is not barred.
4. Before dealing with the contentions, it is necessary to refer to the Indian Carriage of Goods by Sea Act, 1925, hereinafter referred to as "Carriage of Goods by Sea Act". In the Schedule to the Act, Article I are the definition. Rule (e) defines 'carriage' to means as under :---
"'Carriage' of goods covers the period from the time when the goods are loaded on to the time when they are discharged from the ship."
Rule 6 of Article III reads as under :---
"6. Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier of his agent at the port of discharge before or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, or, if the loss or damage be not apparent, within three days, such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading.
The notice in writing need not be given if the state of the goods has at the time of their receipt been the subject of joint survey or inspection.
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. This period may, however, be extended if the parties so agree after the cause of action has arisen. Provided, that a suit may be brought after the expiry of the period of one year referred to in this sub-paragraph within a further period of not more than three months as allowed by the Court. In the case of any actual or apprehended loss or damage, the carrier and the receiver shall give all reasonable facilities to each other for inspecting and tallying the goods."
Article VII reads as under :---
"Limitations on the Application of the Rules :
Nothing herein contained shall prevent a carrier or a shipper from entering into any agreement, stipulation, condition, reservation or exemption as to the responsibility and liability of the carrier or the ship for the loss or damage to or in connection with the custody and care and handling of goods prior to the loading on the subsequent to the discharge from the ship on which the goods are carried by sea."
Article VIII reads as under :---
"Limitation of Liability:
The provisions of these Rules shall not affect the rights and obligations of the carrier under any Statute for the time being in force relating to the limitation of the liability of owners of sea-going vessels."
5. Let me first deal with the second contention namely that the terms in the Bill of Lading extinguishes the right of the plaintiffs to file a suit if not filed within one year after delivery of the goods or when goods should have been delivered. Let me at this stage straight away refer to section 28 of the Indian Contract Act as now amended by Amendment Act No. I of 1997 and which has come into force on 8th January, 1997. Section 28 as amended reads as under :---
"28. Agreements in restraint of legal proceedings, void - Every agree-ment.---
a) by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights; or
b) which extinguishes the rights of any party thereto, or discharges any party thereto, from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent."
It is, therefore, clear that a clause of limitation in the Agreement to reduce the time limit for enforcement of rights or extinguishment of rights, would be void except those covered by the exception clauses. Clause 21 of the Bill of Lading reads as under :---
"Notice in writing of loss or damage must be given to the Carrier's agent at the Port of Discharge of Final Destination at or before removal of the goods supported by invoices and survey, if any. In any event, the Carrier shall be discharged from all liability if suit is not commenced within one year after delivery of the goods or the date that the goods should have been delivered."
This clause considering section 28 of the Indian Contract Act would therefore be prima facie void and inoperative to the extent that it limits the time to institute the suit or it extinguishes the right of the plaintiffs to file the suit.
6. However, as already pointed out, this clause forms part of the Rule 6 of Article HI of the Carriage of Goods by Sea Act. We shall, therefore, examine whether on the pleadings as they now stand, the suit as filed has to be dismissed on the ground that it was not brought within one year from the delivery of the goods or the date when the goods should have been delivered. It is important therefore to note the meaning of the expression 'delivery of the goods or the date when the goods should have been delivered". As reproduced earlier, the liability of the carrier stands extinguished if the liability in respect of the loss or damage is not brought about within one year after the delivery of the goods or the date when the goods should have been delivered. Article VII then provides that nothing contained in the rules prevents a carrier or a shipper from entering into any Agreement, stipulation, condition reservation or exemption as to responsibility and liability of the carrier or the ship for the loss or damage to or in connection with the custody and care and handling of the goods prior to the loading and subsequent to the discharge from the ship on which the goods are carried by sea. In other words, it will have to be examined whether the bill of lading and/or agreement contains a provision between the carrier and the shipper in the matter of liability for loss or damage occasioned before loading and after discharge. Naturally, this will be the subject matter of evidence and cannot be disposed of merely on the pleadings and documents as they now stand.
This would have been sufficient by itself to dispose of this Notice of Motion as the defendants have come to the Court based on the contention that the plaintiffs have sued during the period of carriage. Admittedly as per the pleadings, the loss occasioned is on account of subsequent events to discharge of the goods.
Both the learned Counsel have however drawn my attention to some judgments. I may first deal with the Judgment as referred to on behalf of the plaintiffs. Reliance was placed on the Judgment of the Apex Court in the case of East and West Steamship Company v. S.K. Ramalingam Chettiar, . Before the Apex Court there were four points for consideration which were :---
(1) What is the meaning of the expression 'loss'. Does it mean only such loss as occurs when one says "the goods have been lost or does it include also such loss as is sustained by the owners of the goods whether the shipper or the consignee - when the carrier fails to deliver the whole or part of the cargo shipped ?
This was answered to mean that the word 'loss' in the third clause of paragraph 6 of Article III to the Carriage of Goods by Sea Act, to mean and include any loss caused to a shipper or a consignee by reason of the inability of the ship or the carrier to deliver part or whole of the goods to whatever reason such failure may be due.
(2) Whether this clause only prescribes a rule of limitation or also provides for the extinction of the right to compensation after a certain period of time ?
This was answered as under :---
"The words are apt to express an intention of total extinction of the liability and should, specially in view of the international character of the legislation, be construed in that sense. 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."
(3) For the purpose of clause, what is the date on which the goods not delivered "should have been delivered", means ?
There that was answered by the Apex Court as under :---
"The date when the goods should have been delivered for the purpose of the Third Clause of the 6th paragraph of Article III of the Act is the date when the ship by which the goods were contracted to be carried has left the port at which delivery was to be made."
(4) Whether the requirement in the bill of lading as regards the time within which the notice of claim must be made in order that the carrier may be responsible is void as being against the 8th paragraph of Article III ?
That was answered as under :---
"The stipulation requiring claim for compensation being made within one month from the date of arrival of the ship is therefore null and void."
It is, therefore, clear that the issue which is in issue in this Notice of Motion was not in issue before the Apex Court.
7. My attention has, however, been invited to two other Judgments wherein this issue was in issue. The first Judgment is of the Judicial Committee of the Privy Council in Salmond and Spraggon (Australia) Pty. Ltd. v. Port Jackson Stevedoring Pty. Ltd., 1980 Vol. 2 P.C. 317. One of the issues that arose was as under :---
"That the bill of lading ceased to have any operation after the goods passed over the ship's rail (the "capacity" point)."
This particular clause is known as "capacity" point. The Privy Council dealing with the capacity point was pleased to observe on the facts of that case that when the loss occurred, the goods had been discharged and were no longer in the custody of the carrier. Consequently, the appellant was acting not as an independent contractor employed by the carrier to perform the carrier's obligations under the bill of lading but as a bailee. His liability, in that capacity, was independent of and not governed by any of the clauses of the contract. Thereafter, various clauses have been reproduced. The Privy Council, thereafter, went on to observe as under :---
"These provisions must be interpreted in the light of the practice that consignees rarely take delivery of goods at the ship's rail but will normally collect them after some period of storage on or near the wharf. The parties must therefore have contemplated that the carrier, if it did not store the goods itself, would employ some other person to do so. Further more, a document headed "Port Jackson Stevedoring Pty. Ltd. Basic Terms and Conditions for Stevedoring at Sydney, N.S.W." showed that it was contemplated that the appellant would be so employed. These practical considerations, which are developed in the judgment of the Chief Justice, explain the some what intricate interrelation of Clause 5 and 8."
After so observing the Privy Council went on to hold that irrespective of the period of carriage defined by the contract, the immunity of the carrier is not co-extensive with this period but extends both before and after it. In other words the clause pertaining to recovery for the loss occasioned has not been restricted on loading and discharge of the goods, but also before and after that period.
8. On the other hand the Federal Court of Malaysia in Rambler Cycle Company Ltd. v. Peninsular & Oriental Steam Navigation Company, 1968 Vol. 1 Lloyd's Law Reports page 42, the issue, which has arisen here had similarly arisen in that matter. The question before the Court was as under : -
"The real question here is as to the extent of that ambit and so to what liabilities the limitation contained in Article III applies, or at any rate whether it applies to the liability which has been incurred by the present appellants."
The Malaysian Federal Court in that case, held that Article III Clause 6 would apply only, during the period of carriage namely between loading of the goods and their discharge. The limitation for claiming for loss or damages other than during 'carriage' would be as per the ordinary law of limitation and not the limitation as contemplated by the Carriage of Goods by Sea Act, 1924 as applicable in the Union of Malaysia.
My attention has also been invited to an order dated 9th September, 1997 of this Court in Notice of Motion No. 2163 of 1994 in Suit No. 2718 of 1988 in the case of Classic Carpets v. Contship Container Lines and another. In that case one of the issues was the very issue which has been raised in the present case. In that case by a letter of 23rd October, 1985 the defendants in the Notice of Motion was informed that the goods are lying at the Port unclaimed and incurring storage and damage charges and if the goods are not cleared the same will be auctioned and no claim will be accepted. The plaintiffs replied on 11th November, 1985. The suit was thereafter filed on 23rd August, 1988. A learned Single Judge held that considering the provisions of the Indian Carriage of Goods by Sea Act, 1925 the suit is governed by the provisions of the Act and the suit ought to have been filed within one year as it was not filed within one year the Carrier stand discharged after delivery of the goods is made. It is true that on the facts of that case, the Notice of Motion was allowed and the suit dismissed. However, I am unable to, on the facts of the present case to take the view at an interim stage in the said suit. A plaint can be rejected if there be no cause of action or even if it ex-facie shows that the suit is barred by limitation.
However, as pointed out earlier, the Judgment of the Judicial Committee of the Privy Council has taken the view considering the capacity point that the liability does not cease at the time of undertaking. The Malaysian Federal Court has taken the view that after the goods are discharged, it is ordinary law of limitation which would apply. If that he the case, the suit filed would be within limitation. This cannot be decided on the pleadings as they stand. It would require oral evidence to be led. That being the position, though I am dismissing the Notice of Motion, I leave the issue open to be considered when the matter goes on trial.
9. With the above observations, Notice of Motion dismissed.
10. In the circumstances of the case, there shall be no order as to costs.
11. Issuance of certified copy expedited.
12. P.A. to give ordinary copy of this order to the parties concerned.
13. Notice of Motion dismissed.