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6. The defendant has essentially accepted that it was the agent of the plaintiff. At one place it has denied this fact. The defendant has claimed that mate's receipts were always accepted clean without any qualification by the port authorities who act as Bailees of the cargo in all parts of India. The defendant has also contended that the planning meetings are conducted by the port authorities regularly in which the agents of the owners, charterers and shippers are required to participate as per the usual practice. The agents are required to ensure issuance of clean mate's receipt by the concerned vessel. The defendant has contended that, therefore, due to such practice the agent of the owners of the ship has no option but to abide. The defendant has accepted that it had attended the planning meeting of the port authorities on 11 th September, 1996 ahead of the arrival of the plaintiff's ship which was expected to arrive on 12th September, 1996. The defendant claims that it, as the owner's agent, had to ensure the issuance of "clean mate's receipt" and that it had not given any undertaking in that behalf. The defendant denied the requirement of the knowledge and consent of the plaintiff. The defendant claims that its act was within the express and/or implied power and authority as the plaintiff's agent. The defendant claims that as per the usual practice it duly advised the Master of the plaintiff's vessel that he would be required to issue clean mate's receipt. It has also 6 SUIT-826/1998-Judgment contended that the Master of the plaintiff's vessel was informed about the same before the commencement of the loading of the cargo. The defendant has further claimed that it repeatedly requested the plaintiff to appoint Surveyor for inspection and testing of the cargo. That was not heeded by the plaintiff. However the Surveyor did not approve the cargo. The defendant has denied that it had the obligation to sort out the cargo well in advance and prior to the vessel being berthed at the dock.

Knowledge of the rules by-laws, procedures and obligations of agents must be imputed upon the defendant.

32. The importance of the clean mate's receipt on the bill of lading must, therefore, be seen. The bill of lading will show the goods required to be shipped and exported. The goods may be clean or damaged. If the goods are damaged at the port itself the port authority or the exporter would be liable and the owner of the ship would not be liable for the damage as the damage caused in transit. If the owner of the ship certifies that the goods are not damaged and are clean, the owner alone would be liable for any damage to the goods later shown as damage caused in transit. The port authority would, therefore, not countenance any receipt except a clean mate's receipt. Following as a corollary therefrom the owner of the ship would be entitled to reject the goods for which a clean mate's receipt cannot be given. The port authority in this case insisted upon a clean mate's receipt, but did not make a provision for rejection of goods. The port authority specified that any clause remark for the goods would not be accepted. Hence when the obligation was to be performed but the corresponding right could not be availed, the port authority informed the defendant to advise the master of the vessel on arrival accordingly. The minutes show that the defendant agreed to this requirement.

22 SUIT-826/1998-Judgment

33. The expression "clean mate's receipt" must therefore, be compared with the mate's receipt which is not clean; ie a "claused mate's receipt". It would contain a clause showing the defects, if any, or the damage to the goods. Such receipts were not to be accepted.

the requirement of issue of clean mate's receipt. The telex dated 18th September 1996 is itself only for two questions relating to the appointment of a surveyor and the requirement of income tax authority. It would be inconceivable for the master of the plaintiff's ship to imagine that the fax dated 14th September 1996 was for the 32 SUIT-826/1998-Judgment issuance of clean mate's receipt, the aspect which would be wholly foreign to him and which was required as a practice only by the port authority in India. The telex dated 18 th September, 1996 essentially sets out the format of the letter of authority. A reading of the letter shows that the defendant was more interested in its appointment rather than in performing its responsibility and obligations as the agent of the plaintiff. It only mentions in the passing the advice to appoint surveyors to sort the goods (which it should have done itself long ago) and it only makes a reference to the earlier letter / fax / telex dated 14 th September 1996 of the requirement of clean mate's receipt. Such a letter would not constitute the act of the defendant to ensure issuance of clean mate's receipt. The fact that the defendant had not appointed its surveyor to sort the exportable goods can be seen from the letter of the defendant asking the plaintiff as late as on 18 th September, 1996 whether the surveyor was to be appointed and suggesting the appointment. The specific condition that the mate's receipt with any clause or remark will not be accepted has not been informed to the plaintiff at all even in the telex dated 18th September, 1996.