1 ssm IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUIT NO. 621 OF 1992 United Chemicals, a Partnership firm duly registered under the Partnership Act, 1932, having its Office at 190/3-B, Mangaldas Building, Mangaldas Road, Bombay-400 002. ...Plaintiff. Vs. 1. APC Pharmaceuticals & Chemicals Ltd., a Company incorporated and registered under the Law relating to Companies in Hongkong having its Registered office at GPO Box 47404, 35, Morrison Hill Road, 3/F, Wanchai, Hongkong and having an office at 43, Vikas Centre, Santacruz (West), Bombay-400 054. 2. Mitsui O.S.K.Lines (H.K.) Ltd. A Company incorporated and registered under the law relating to companies in Hongkong having its office at 20th Floor, Admirally Centre, 2nd Tower, 18 Arcold Road, Hong Kong. 2 3. National Insurance Company Ltd., a subsidiary of General Insurance Corporation of India, Corporate constituted under the General Insurance Business (Nationalisation) Act, 1972 having its registered office at 3, Middleton Street, Calcutta 700 071 and having an office at 15.17, Wyndham Street, 4th Floor, Hong Kong. ...Defendants. Mr. Jacinta D’Silva for the Plaintiff. Mr. Girish Desai with Mr. I.A. Bootwala i/by M/s. Bootwala & Co.for Defendant No.2. Mr. Pradeep Rajgopal with Ms. Malan Manoharan i/by Ms. Rekha Rajgopal for Defendant No.1 None for Defendant No.3. CORAM :- ANOOP V. MOHTA, J. DATED :- 6TH JULY, 2009. JUDGMENT:- 1. The suit is for recovery of loss due to short landing of goods. 2. On 12/09/1990, the Plaintiff placed an order with Defendant No.1 for purchase of Tetracycline HCL BP 80. Defendant No.1 agreed to sell and 3 export the said Tetracycline at the agreed price. The goods of first Invoice 4000 kgs of Tetracycline, at an aggregate price of U.S.$ 79,200/-, was ordered by the Plaintiff. 3. On 16/11/1990, pursuant to the Invoice raised by the Defendant, the Plaintiff opened a Letter of Credit of Syndicate Bank for goods covered and made the full payment accordingly. (Exhibit ‘P-2”). On the same day, the goods of second Invoice for 1550 kgs. of Tetracycline at an aggregate price of U.S.$ 30,690/- was also ordered. The Plaintiff opened Letters of Credit of Andhra Bank and made the full payment. 4. The goods in respect of the above two Invoices were shipped by Defendant No.2 to India in terms of Bills of Lading by Vessel Ocean Sirius. (Exhibit ‘P-3’). 5. On 19/11/1990, Defendant No.1 insured the goods in Transit by acquiring Policy with the National Insurance Company Ltd. (Defendant No.3). 62 Drums US$ 33759/- and 160 Drums US$ 87120/-. Clause A covers the risks of leakage and breaking of package, Transshipment risk, theft, pilferage, non-delivery of goods etc. (Exhibit ‘P-9’). 6. On 20/11/1990, the goods were loaded on the ship at Hongkong in terms of Two Bills of lading. B/L No. 310775994 – 160 Drums and B/L No. 310775959 – 62 Drums. A Bill of Lading was issued by the Shipping Company and not by its Agents Orient Ship Agency Pvt. Ltd. (Exhibit ‘P-4’ and P-5’). On the same day the goods transshipped at Singapore in Vessel 4 M. Vega (Exhibit ‘P-26’). 7. On 21/12/1990, the goods arrived at Indira Dock at Mumbai. The goods under the Bills of Ladings were discharged into the custody of the Bombay Port Trust (for short, “B.P.T.”). On 28/02/1991 a Bill of Entry made. 8. On 08/03/1991, the Customs Duty paid and completed the formalities and took the custody of the goods. (Exhibit ‘P-21’ and ‘P-22’). 9. On 30/03/1991, the “short landing Certificate” issued by B.P.T. (Exhibit ‘P-6’ and ‘P-7’)- Sr.No. Invoice Packages Packages Landed Short Landed 1. 160 128 32 2. 62 42 20 TOTAL 222 170 52 10. On 19/01/1991, the International Surveyors and Adjusters Certificate of Survey was furnished by Defendant No.1 after the Plaintiff had informed to them about short landing of goods at Mumbai. (Exhibit ‘P-8’). 11. On 23/01/1991, a notice to Defendant No.3 by the Plaintiff clearing agents Jhaveri Bros. 12. On 28/01/1991, a reply by Defendant No.3, Insurance Co. that they are looking into the matter. 5 13. On 06/05/1991, the Plaintiff raised the claims and sent Notice to Agents of Defendant No.2 (Exhibit- ‘P-10’ & ‘P-11’). 14. On 18/06/1991, a reply of the Agents of Defendant No.2 alleging that the Carrier is not liable. (Exhibit- ‘P-12 & 13’). 17. On 06/06/1991, the claims raised under the Insurance Policy by the Plaintiff against Defendant No.3 in respect of the short landed goods. (Exhibit - ‘P-14, 15, 16 and 17’). 15. On 17/07/1991, Defendant No.3 asked clarifications from the Plaintiff in reply to the Claims. (Exhibit- ‘P-18’). On 31/07/1991. The clarification submitted by the Plaintiff to Defendant No.3 Insurance Company. (Exhibit- ‘P-19 & 20’). On 16/10/1991, Defendant No.3 Insurance company rejected the claims of the Plaintiff. 16. On 30/07/1991, an agent of Defendant No.2, Carrier informed the Plaintiff that the goods not received were lying at FRERE BASIN WAREHOUSE and asked to collect the same. (Exhibit - ‘P-23 & 24’). 17. On 06/08/1991, a reply of the Plaintiff to the Agent of Defendant No.2 inquiring whereabouts of the goods. (Exhibit- ‘P-25’). 18. On 08/08/1991, the agents of Defendant No.2 admitted of short landing of 52 drums and that the goods were not lying at Frere Basin Warehouse when the Container was devanned. (Exhibit - “’P-27’). 19. Defendant No.1 and 2 appeared and filed their written statements. 6 None appeared for Defendant No.3. The parties have lead evidence except Defendant No.3. 20. The issues framed are as under:- i) Do the Plaintiffs prove that they received only 218 (128) drums out of 160 drums and 42 drums out of 62 drums, covered by two bills of lading and to that extent suffered loss? ii) Do the Plaintiffs prove that they are entitled to recover from the defendants Rs.9,10,423/- along with interest at the rate of 18% per annum making it together Rs.10,32,993/- upto date of filing of the suit and interest at the rate of 18% per annum on Rs.9,10,423/- from the date of filing of the suit till realisation? iii) Do the plaintiffs prove that the goods were insured in transit with defendant No.3 in terms of two policies dated 12.11.1990 and the defendant No.3 is liable to pay the compensation for the loss/damage of the goods? iv) Does the defendant No.2 prove that they had shipped the goods in the terms of two bills of lading issued by them, both dated 12.11.1990 from Honkong to Mumbai with transshipment at Singapore and delivered the sealed container to Bombay Port Trust and with the closed container and the seal 7 intact, thereby absolving them from the suit liability? v) Do the Plaintiffs prove that the defendant No.1 had supplied only 128 drums instead of 162 drums and only 42 drums instead of 62 drums as ordered to be supplied thereby resulting into short supply? vi) Does the defendant No.3 prove that they are not liable to pay the compensation because it is not the case of loss of goods in transit but short stuffing of the cargo in the container? Issue No.1 and 5:- 21. The documents, at Exhibits P-2, P-3, P-4 and P-5 in the evidence of the Plaintiff, including the two Invoices of Goods which are the subject matter of this Suit. The Bills of Lading supports that the Suit Goods were loaded on the Ship. The documents at Exhibit P-6 and P-7 public documents issued by the B. P. T. Docks dated 30th March, 1991 are the Short Landing Certificates. The Short Landing Certificate dated 30th March, 1991 at Exhibit P-6 & P-7 in evidence issued by B.P.T. shows the following short landing of Suit goods. Sr.No. Invoice Packages Packages Landed Short Landed 1. 160 128 32 2. 62 42 20 TOTAL 222 170 52 8 22. The evidence of the Plaintiff has gone unchallenged, unrebutted and unrefuted by the defendants. The Plaintiff has proved that they have received only 128 drums out of 160 drums and 42 drums out of 62 drums covered by two bills of landing and suffered loss to that extent. 23. Defendant No.1 has examined one Shri Ravindra Pasta, General Manager, based upon a letter of Authority dated 5th November, 2008 which was not supported by the Resolution of the Board of Directors of Defendant No.1 Company. The basic reliance was on the certificate of Surveyor dated 19th January, 1991. The said Certificate was neither identified nor the contents thereof were proved by the witness, specially when the authority itself was doubted and not admitted the contents of the said report/ Certificate. (Exhibit P- 8). Defendant No.1 failed to prove the same. Only because a document is exhibited, it does not mean that the contents of the said document is also proved. Admittedly the author of the said Certificate was not examined. The contents of the documents are also not proved by any other modes available under the Evidence Act. Issue No.2:- 24. The Plaintiff has relied at Exhibit P-2 and P-3 the Invoices of Defendant No.1 where one Kilo of Tetracycline BCL BP 80 costs US$ 19.80. The Loss of 32 drums covered by the Invoice No. 1580/90 dated 16th November, 1990 is US $ 15480 and loss of 20 drums covered by Invoice No. 1580A/90 dated 16th November, 1990 is US$ 9900. The total loss 9 therefore is of US$ 25740. When the suit was filed on US$ was equal to Rs. 26.20ps. On the date of filing of the Suit US$ 25740 is equivalent to Rs. 6,74,388/-. 25. Exhibit P-21 and P-22 show the customs duty paid by the Plaintiff. The Plaintiff has stated in Para 31 of its Affidavit of evidence that he was required to pay premium of 35% to acquire necessary Import licenses of the said goods. This also remained unchallenged. 26. The Plaintiff, therefore, has spent for the goods which were not received by him. The products thereof were sold in the market then the gains/ profits would include the expenses incurred by the Plaintiff including the said premium paid for the procurement of Licenses. The goods were not available to the Plaintiff due to the negligence of the Defendants, there is loss to the extent of the premium which is deprived to the Plaintiff. It is therefore, the liability of the Defendants to reimburse the same. There is no dispute about this fact also. The Plaintiff therefore, proved that they are entitled to recover from the defendants Rs.9,10,423/- along with the interest at the rate of 18 per cent per annum making it together to Rs.10,32,993/- upto the date of filing of the suit and the interest at the rate of 18% per annum from the date of filing of the suit till realisation. Issue Nos. 3:- 27. Defendant No.3 is the Insurance Company, not lead any evidence or 10 contested the suit except by filing the Written Statement. None appeared for Defendant No.3. 28. The documents at Exhibit P-9 in evidence are the two Insurance Policies covering the goods under both the Bill of Ladings at Exhibit P-4 and P-5. 29. The documents at P-14, P-15, P-16, P-17, P-19, and P-20 have supported the claims raised by the Plaintiff with Defendant No.3 (Insurance Company) and also the clarifications raised by the correspondences. 30. Defendant No.3 or the other contesting defendants has not dipsuted the said Claim raised by the Plaintiff under the two policies. The Plaintiff proved that goods were insured in transit with Defendant No.3 in terms of the policies dated 12th November, 1990 and; that Defendant No.3 is liable to pay the compensation for the goods. ISSUE NO. 6:- 31. Defendant No.3 not contested and not lead any evidence and thereby has failed to prove the issue in all respect. Defendant No.3 apart from not stepping into the witness box, not even cross-examined the witness of the Plaintiff. In the result, the averments and the evidence of the Plaintiff in respect of the Insurance Policies, its claims, and the correspondence has gone unchallenged. On the contrary, the Plaintiff has 11 proved that Defendant No.3 is liable to pay the compensation pursuance to the policies covering the risk of act of transshipment at Singapore. The Insurance Certificates under the Marine Insurance Act, 1963 which places a legal obligations on the Insurance Company to pay or make out the loss and as Defendant No.3 against whom the valid claim is made, has failed to appear and controvert or to resist the claim. Issue No.4:- 32. Defendant No.2 laid the evidence of one Shri B.B. Chaudhary of M/s. Orient Ship Agency Pvt. Ltd. Who was not employer or employee of Defendant No.2. Based upon the authority letter which nowhere authorized to give evidence on behalf of Defendant No.2. There was no resolution of Board of Directors of the Company authorizing the said witness to give evidence on their behalf. Therefore, the oral evidence of this witness is in no way sufficient to accept the defence of Defendant No.2. The evidence of Power of Attorney Holder cannot be read as that of the principal. This witness, even otherwise has no personal knowledge whether the container was sealed at Hongkong or whether it was intact or seal was removed at Mumbai. There is no documentary evidence produced on record by Defendant No.2 in support of its case. There is no evidence on record to support that all the containers from the first ship Ocean Sirius were transferred on the Port to the Vessel Vega which reached at Mumbai. Defendant No.2’s witness has admitted the evidence of Plaintiff and 12 basically Exhibit P-23, P-24, P-25 and P-27. There is no sufficient defence placed on record by Defendant No.2 for the short landing. The short landing Certificate issued by the Port Authorities remained unchallenged. The admitted responsibility and the obligation of Defendant No.2 to bring the goods of Plaintiff in full, specially in view of Clause 23 of Bill of Lading, being the Carrier, is remained unchallenged. 33. The Bill of Lading mentions the weight of the goods stuffed in the container. The entire container was weighed before it is shipped on the Vessel. Defendant No.2, therefore, fully aware of weight of the goods as per the Bill of Lading. Therefore, non-delivery or short delivery in any way does not protect the Shipping Company from its responsibility or liability. There is nothing on record to show by Defendant No.2 that the Company took all the care and caution that was reasonably expected by a man of ordinary prudence. (A.I.R. 1963, Calcutta 510 Jagdishprasad Pannalal and Co. Vs. India Steamship Co. Ltd.) 34. Defendant No.2, charged freight as per the weight in the container. Therefore, when there is a clear short delivery of goods as per the Bill of Lading, the Carrier is liable. (M/s. Jayanti Shipping Co. Ltd. Vs. The Food Corporation of India, AIR 1979, Kerala 187. 35. In the case of General Traders Ltd. Vs. Pierce Leslie (India) Ltd. Reported in AIR 1987 Kerala, 62, it is held in Para 16 as follows:- “Halsbury in para 659 (Vol 43 of the Fourth Edition) quotes 13 from Abbott’s Law of Merchant Ships and Seamen : “ A loss occurring during the discharge, but before the delivery to the consignee is complete falls on the ship owner”. The law on the point is thus clear, that unless the terms of the contract specifically provide otherwise, the carrier’s responsibility would continue until the goods are unloaded on the shore.” 36. In the present case also when the goods were unloaded there was short landing of goods to the one mentioned in the Bill of Lading. It is, therefore, the liability of Defendant No.2 to bear the loss caused to the Plaintiff. The said judgment says in the last para that the liability is jointly with the Insurance Company. In another case in Home Insurance Co. Ltd. Vs. Ramnath & Co.AIR 1955 Madras, 602) it is held that the Shipping Company is liable for the value of goods. 37. The defence of Defendant No.2 that they were not associated with the loading of the said container nor with the counting of contents of the said container which was the responsibility of Defendant No.1 as the shippers and clearing agents of the Plaintiff, based upon the terms/ conditions of 2 policies of lading, stating “Shipper’s Load Count”. For above reasons it nowhere disprove the case of the Plaintiff and or absolve them from the liability. There is no dispute that the said Vessel was stuffed and sealed by the Plaintiff’s forwarding agent/ the shippers, cleaning agent/ forwarding agent of Defendant No.1. It is also not sufficient to discharge the liability as sought to be contended by Defendant No.2 that the suit container was not in charge or control or possession of Defendant 14 No.2, once it was entrusted in the custody of the BPT form the vessel of Defendant No.2. 38. Defendant No.2 and Defendant No.1 failed to prove and discharge their burden that the suit container was discharged in the same sealed condition at Bombay as it was loaded on board the Vessel of Defendant No. 2 at Honkong. Basically, when there is a sufficient material to show of short Landing of goods. The tally sheets Exhibit – 3 itself is also not sufficient to absolve the Defendants liability to compensate for the short landing of goods. Therefore, the Plaintiffs claim against the Defendants in view of above is proved. 39. Defendant No.2 following submission based upon the 1986 Vol. 10 of ECC Page 191 and 1986, 25, ELT page 948, is also not sufficient to dismiss the claims. “A full container load when unloaded from the Vessel and the seals are found intact, then the vessel owner shall not be held responsible for any short landing or be made liable to pay penalty.” In the same Judgment, it is also mentioned that “any shortage noticed in such Survey report will have to be accounted for by the Carrier”. The carrier’s obligation and liability are binding. It also failed to discharge the burden. (Nath Bros. Exim International Ltd. Vs. Best Roadways Ltd., (2000) 4 S.C.C., 553, ) The Plaintiff has proved the short delivery of goods and therefore, also the claims against the Defendants. (M/s.Road Transport Corporation & Ors. Vs. M/s. Kirloskar Bros. Ltd. AIR 1981, Bom. 299.) 40. The Witness of Defendant No. 1 has stated 15 that he was not present when the suit goods were stuffed in the container in Honkong on 16th November, 1990. He further stated that the job of stuffing the container was done by the shipping Company i.e. Defendant No.2; the surveyor report (Exhibit- P-8) was not sent along with the Bill of Lading; the survey report was dated 19th January, 1991 but the goods landed at Bombay on 21st December, 1990. The said witness unable to answer the reason for preparation of the surveyor report subsequent to the landing of the goods. In fact suggestions was also put in the cross- examination that 52 drums were not loaded in the container and the survey report is fabricated. 41. The Plaintiff, therefore proves that Defendant No. 1 had supplied only 128 drums instead of 168 drums and 42 drums instead of 62 drums as ordered resulting into short supply. Therefore, the submission and the case of Defendant No.1 that no claims have been made against them and it is only against Defendant Nos. 2 and 3 is incorrect. The Plaintiff is entitled to a decree in view of above against all the Defendants. However, as a goods are covered under the policy and as Defendant No.3 failed to resist and object the same, the Suit is decreed against all but Defendant No. 3 liable to pay the amount as prayed. 42. In view of the above observations, the Suit is decreed against the Defendants as prayed. However, Defendant No.3 to pay the decretal amount as under:- 16 “(a) Defendant No.3 to pay to the Plaintiffs a sum of Rs. 10,32,993/- (Rupees Ten lacs Thirty Two Thousand Nine Hundred Ninety Three only) as per particulars of claim annexed as Exhibit “O” to the plaint with further interest on Rs. 9,10,423/- at the rate of 9% (Nine Per cent) p.a. from the date hereof till payment and/or realisation. . No order as to costs. (ANOOP V. MOHTA, J.)