Calcutta High Court
Bhairamal Gopiram vs Owner And Parties Interested In The ... on 12 May, 2004
Equivalent citations: 2004(3)CHN272
Author: Ashim Kumar Banerjee
Bench: Ashim Kumar Banerjee
JUDGMENT Ashim Kumar Banerjee, J.
1. This is an application filed by M/s. First Steamship International (P.T.E.) Ltd. claiming to be the owner of the vessel M.V. Everwise inter alia praying for taking out the plaint of the file, in alternative for dismissal of the suit as well as for return of the security. The plaintiff in the above suit was the holder of three bills of lading issued by one M/s. Express Score Corporation appearing at pages 53-58 of the petition. Under the said bills of lading the plaintiff was to get 40, 45 and 50 pieces of Indonesian logs, which were to be carried from Indonesia to Indian Port by the vessel M.V. Everwise. Although the bills of lading were produced and necessary formalities were completed by the plaintiff the goods were not delivered at once and the goods were ultimately delivered in June, 2001 instead of February, 2001 thereby causing loss and damages to the plaintiff for which the instant suit was filed by the plaintiff inter alia claiming for a sum of Rs. 83,33,123/- as and by way of damage. The instant suit was filed as and byway of admiralty action on October 08, 2001 and an application for arrest was made. Initially the ship was arrested which was later on released upon furnishing of security by the ship-owner being the applicant before me.
2. According to the applicants, they were not having any privity of contract with the plaintiff. Under a charter party agreement the ship was given to the charterer namely M/s. Liberty Carriers SK. Under the said charter party agreement the Master of the ship was to conduct the carriage as per the instruction of the charterer. Under Clause 8 of the charter party agreement the charterer was authorized by the owner and the Captain of the ship to issue bills of lading. According to the applicant, they were carrying these logs amounting to 1123 and 334 pieces respectively under two bills of lading issued by them in favour of M/s. Kundanmals International (P.T.E.) Ltd. Under the said bills of lading appearing at pages 93-94 of the petition the goods were to be discharged at Tuticorin, India. Accordingly, the goods were discharged at Indian Port by January 21, 2001, However, the part of the goods were delivered at Haldia instead of Tuticorin as according to the applicant, they did so as per the instruction of the charterer.
3. According to the applicant, since the goods were discharged as per the original bills of lading by January 21, 2001, they had no responsibility whatsoever with regard to the ultimate delivery of the goods. In the alternative it has been contended that the bills of lading under which the plaintiff is making a claim had been issued in February, 2001 much after the goods had been discharged by the ship at the Indian Port. Hence the applicants have no responsibility on the issue of delayed delivery of goods.
4. Mr. Surhid Roy Choudhury, learned senior counsel, appearing in support of the application has contended that once the goods had been discharged at Indian Port their responsibility ceased. Mr. Roy Choudhury has further contended that the plaintiff is the holder of the bills of lading issued by the charterer and by such bills of lading the plaintiff is not entitled to sue the owner of the ship for alleged delayed delivery.
5. Mr. Roy Choudhury, in support of his contentions has cited following three decisions:--
(i) Hamburg Houtimport BV v. Agrosin Private Ltd. and Anr., reported in 2003(2) WLR 711;
(ii) Epoch Enterrepots v. M.V. Won Fu, and
(iii) M.V. Elisabeth and Anr. v. Harwan Investment & Trading Co. and Anr., .
6. Mr. Sudipta Sarkar, learned Sr. Counsel, appearing for the plaintiff while opposing this application has contended that the original bills of lading were issued by the shipper under which the subject consignment was supposed to be delivered at Indian Ports. Mr. Sarkar, has further contended that once under the original bills of lading the shipper was supposed to be delivered the entire consignment unless and until that responsibility was discharged by the ship the shipper could not avoid its responsibility. Mr. Sarkar has further contended in the alternative that assuming the plaintiff was entitled to sue on the basis of the bills of lading issued to them by the charterer even then the shipper was responsible in view of the Charter Party Agreement itself. He has drawn my attention to various clauses of the Charter Party Agreement including Clause 8 which authorized the charterer to issue bill of lading on behalf of the Captain, who was the only person authorized to issue bill of lading. Mr. Sarkar, in support of his contentions has also relied upon the decision of the House of Lords in the case of Hamburg (supra).
7. To decide the present issue in hand let me first discuss the cases cited by the parties.
(i) Homburg Houtimport BV v. Agrosin Private Ltd. and Anr., reported in 2003(2) WLR 711: In this case, the claimant on the basis of the chaterer's bill of lading initiated an action against the shipper. The Trial Court held that the bills of lading were charterer's bills and as such, no action would lie. The Court of Appeal by a majority held that the bills were shipowner's bills and as such, the action would lie . The House of Lords reversed the decision of the Court of Appeal and thereby affirmed the decision of the Original Court.
In its detailed 72 pages judgment the House of Lords not only discussed the proposition of law involved in the case but also has meticulously examined each and every document used in evidence before the Original Court. After examining each and every document on factual score by a majority decision the House of Lords reversed the decision of the Court of Appeal. Some of the relevant paragraph as referred to by the learned Counsel for the parties are quoted below :
"67. Whether the shipowners are liable in contract depends upon whether they were parties to the contract of carriage made with the shippers and evidence by the bills of lading. The time charter provided in Clauses 8 and 33 that CPS should be entitled to require the Master to sign bills of lading on behalf of the shipowners or authorise their agents to sign bills of lading on behalf of the Master who would in turn be contracting on behalf of the shipowners. So there is no doubt that CPS had authority to cause a contract of carriage to be created between the shipowners and the shippers. But the question is whether they did so.
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71. The forms, therefore, were printed for use as owner's bills. But the port agents signed them, in the signature boxes on the front of the documents, 'as agent for Continental Pacific Shipping (the carrier)' or 'as agents for the carrier Continental Pacific Shipping' or 'as agents for Continental Pacific Shipping as carrier'. That meant, in my opinion, that anyone reading only the front of the document would think that CPS was the party assuming liability as carrier. He might have been slightly puzzled by the statement that the bill of lading had been signed by the Master when it evidently had not. He may well have reflected that people often use forms which have in some respects to be adapted for the particular circumstances without deleting the inconsistent parts: see The Okehampton [1913] P 173.
But the reasonable reader of the front of the bill of lading would have had no doubt that CPS, and only CPS, was accepting liability as carrier. 'Carrier' is a technical term familiar to anyone who has to deal with a bill of lading. The bill of lading evidences a contract of carriage and 'carrier' is the name given to one of the parties to such a contract. As it happens, that is what condition 1(c) on the back of these bills of lading says. But that is what a reasonable reader would have thought it meant even without looking at the back. It is what Article 1(a) of the Hague Rules says it means. In Fetim BV v. Oceanspeed Shipping Ltd. (The Flecha) [ 1999 ] 1 Lloyd's Rep 612 Moore-BickJ, faced with a similar Continental Pacific Shipping bill of lading signed 'as agents for Continental Pacific Shipping as carriers' said, at p 619, that the term 'carrier' was being used 'loosely' and that this was 'not unusual or surprising'. I can well imagine that a timber merchant in Kuching might say over coffee that his goods were being carried by Continental Pacific Shipping without knowing or caring whether the particular vessel was owned, demise chartered or on time charter. But such loose usage of a critical expression in the bill of lading itself does seem to me surprising.
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116. It follows that in the case of goods carried under a bill of lading issued by a time charterer, the liability in personam of the time charterer will not enable the cargo owner to arrest the ship. He may do so only if the shipowner is also liable in tort. But such liability will not exist if the time charterer is able to stipulate for complete exemption on the part of the owner. The remedy which the Hague Rules were intended to preserve may in such cases be unenforceable."
(ii) Epoch Enterrepots, : In this case, an exporter of minerals executed an agreement for export to a company in Taiwan and in turn he entered into an agreement with a Tokyo firm being the disponent owner of the vessel for carriage of goods to Taiwan. The suit was filed by the exporter in Admiralty Jurisdiction seeking arrest of the ship on account of damages for breach of contract. The Apex Court on examination of facts came to conclusion that the goods were not at all loaded in the ship and as such, this was not a maritime claim which could attract the admiralty jurisdiction.
(iii) M.V. Elisabeth, : This case was referred to by Mr. Roy Chowdhury to give me an idea about the guidelines to be followed by a Court in Admiralty Jurisdiction. The Apex Court while considering the wide scope of Admiralty Court held that any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship can attract Admiralty Jurisdiction. The Apex Court relying on an English decision also observed that the jurisdiction is wide enough to cover all claim in tort or contract arising out of any claim for carriage of goods by sea. Paragraphs 47, 49, 51, 53 and 55 being relevant herein are quoted below:
"47. The foundation of an action in rem, which is a peculiarity of the Anglo-American law, arises from a maritime lien or claim imposing a personal liability upon the owner of the vessel. A defendant in an admiralty action in personam is liable for the full amount of the plaintiffs established claim. Likewise, a defendant acknowledging service in action in rem is liable to be saddled with full liability even when the amount of the judgment exceeds the value of the res or of the bail provided. An action in rem lies in the English High Court in respect of matters regulated by the Supreme Court Act, 1981, and in relation to a number of claims the jurisdiction can be invoked not only against the offending ship in question but also against a 'sistership' i.e., a ship in the same beneficial ownership as the ship in regard to which the claim arose.
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49. A ship may be arrested (i) to acquire jurisdiction; or (ii) to obtain security for satisfaction of the claim when decreed, or (iii) in execution of a decree. In the first two cases, the Court has the discretion to insist upon security being furnished by the plaintiff to compensate the defendant in the event of it being found that the arrest was wrongful and was sought and obtained maliciously or in bad faith. The claimant is liable in damages for wrongful arrest. This practice of insisting upon security being furnished by the party seeking arrest of the ship is followed in the United States, Japan and other countries. The reason for the rule is that a wrongful arrest can cause irreparable loss and damages to the shipowner; and he should in that event be compensated by the arresting party. (See Arrest of Ships by Hill, Soehring, Hosoi and Helmer, 1985).
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51. The attachment being only a method of safeguarding the interest of the plaintiff by providing him with a security, it is not likely to be ordered if the defendant or his lawyer agrees to "accept service and to put in bail or to pay money into Court in lieu of bail". (See Halsbury's Laws of England, 4th Edition Vol.1 p.375 etc.).
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53. If the ship or cargo under arrest before judgment has not been released by the defendant by putting in sufficient bail, and if the property is found deteriorating, the Court has the power to order the sale of the property after notice has been duly issued to the parties interested.
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55. A personal action may be brought against the defendant if he is either present in the country or submits to jurisdiction. If the foreign owner of an arrested ship appears before the Court and deposits security as bail for the release of his ship against which proceedings in rem have been instituted, he submits himself to jurisdiction."
8. On careful examination of the aforesaid decisions cited by the parties in my opinion the following proposition of law, relevant herein, would reveal --
(i) when any claim arises out of a contract for carriage of goods by sea and when the goods on board are to be discharged at the discharging port and to be delivered to the consignee, any claim arising out of the said transaction and/or agreement can attract admiralty jurisdiction,
(ii) once a suit is filed in Admiralty Jurisdiction against the ship, it is an action in rem. After the ship is arrested and a party comes to own the responsibility and furnishes security for discharge of the ship in case of a maritime claim it becomes a personal action,
(iii) in case of issuance of bill of lading, the owner has a responsibility to have safe discharge of delivery of cargo and in case of breach, the jurisdiction of the Admiralty Court can be attracted.
9. Now coming back to the present case, the subject consignment was covered under the original bills of lading issued by the owner being the applicant herein. However, there had been subsequent sale under which a part of the cargo was purchased by the plaintiff. The said part was delivered admitted at Haldia, which was not the original port of discharge. While effecting delivery there had been admitted delay, who is responsible for such delay is a question to be decided at the final trial. In the plaint, specially in paragraphs 12 and 13, categoric assertion has been made by the plaintiff that the goods were not delivered initially at the instance of the owner in view of the dispute between the owner and the charterer. Hence, this, issue, in my view can only be effectively adjudicated upon at the time of final trial. Mr. Roychowdhury has strenuously contended that once the charterer issued the bill of lading the owner did not have any responsibility whatsoever in the transaction. With due respect to Mr. Roychowdhury, this is an issue involving mixed question of fact and law. Even in the case of Hamburg Houtimport BV (supra) the House of Lords (as I have observed hereinbefore) examined the documents and ultimately came to a finding that the owner had no responsibility. That stage in my view, has not come up as yet, specially when no written statement has been filed, by the applicant.
The matter can be viewed from another angle. When the ship was originally arrested the applicant offered security without prejudice to its rights and contentions with regard to maintainability of the suit. At least from the order of release of the ship I do not find any specific assertion made on behalf of the applicant that the owner had no responsibility in view of the fact that the subject bills of lading were issued by the charterer and not the owner. Reference may be made in this regard to the interim order passed by this Court on 16th October, 2001 appearing at pages 80-81 of the petition. On the basis of the submission made on behalf of the applicant the ship was released upon furnishing of security. Once the ship has been released upon furnishing of security, the instant action has become a personal action. Without waiting for the written statement to be filed by the applicant and without having the regular witness action, it would not be proper for me to discharge the applicant from the instant action and by directing return of the security. It may be true that after examining the evidence the Court might come to a conclusion that the applicant, had no responsibility in the instant case. I, however, do not wish to venture that exercise without having the benefit of the written statement and the evidence which would come in due course.
10. In the result this application fails and is hereby dismissed.
11. The applicant would be at liberty to file written statement within two weeks after summer vacation; cross order for discovery within two weeks thereafter and inspection forthwith. Let the suit appear in the monthly list of July, 2004.
12. It is, however, made clear that any observation made by me herein would not in any way affect the rival contentions of the parties at the time of final hearing of the suit.
13. At the end, I wish to add that on a fourth bill of lading the plaintiff filed a civil suit against the charterer where the applicant had also been added as a party and there the learned Single Judge, on an interlocutory application, held that the applicant had no responsibility under the concerned bill of lading. I am told that the said issue is now pending before the Court of Appeal. Since this is an admiralty action, I do not wish to be influenced by the said decision of the learned Single Judge in the civil suit and as such I have not discussed the said decision while delivering my instant judgment.
14. Urgent xerox certified copy of this order may be supplied to the parties upon compliance of all formalities.