Case: Trustees of The Port of Bombay Vs. Premier Automobiles Limited

The Premier Automobiles Ltd, hereinafter referred to as the plaintiffs, imported 13 cases of machinery from Italy. Case No. 2 49, which is the subject-matter of the controversy before us, contained an internal grinding machine weighing over 3 tonnes. It arrived in Bombay on February 21, 1960, by S. S. Jalsilton Hall. The "Board", constituted under section 4 of the Bombay Port T rust Act, 1879. for short the Act, was a body corporate with a perpetual succession and a common seal. It was called "the Trustees of the Port of Bombay" and could sue and be sued by that name. We shall, however, refer to it as "the Board" for that is how it has been referred to in the Act and the impugned judgment. Since the Board was charged with the duty of carrying out the provisions of the Act, and had, in particular, the duty, under section 61A(1) of the Act, to take charge immediately upon the landing of any goods, it took charge of case No. 249 also on its landing in Bombay on February 21, 1960. The Board has in fact filed document Ex. K to prove that the case was in a damaged condition when it landed on February 21, 1960, and that attention to that fact was drawn of the handling agents M/s Scindia Steam Navigation Co. Ltd. It purports to be a contemporaneous document. The case was placed on a four-wheeler trolly and was being carried to one of the sheds in the docks when it fell down and the machine contained in it was severely damaged. Several employees of the Board were in charge of the case and the trolly at that time.It is said that a survey of the damage was carried out at the instance of the plaintiffs, who then took delivery on February 29, 1960. They carried the case to their factory and had the machinery examined by another firm. That firm valued the machinery at Rs. 65, 000 and the damage at Rs. 55, 000. The plaintiffs gave a notice claiming Rs. 65, 774.10. The Board denied the claim in their reply and alleged that the machinery was in a broken condition at the time of the landing and it was due to the damaged condition of the case that it slipped and fell from the trolly accidentally. They relied on the aforesaid report Ex. K and pleaded, further, that they were not liable because of section 87 and certain bye-laws of thecontroversy led to the suit which was instituted on August 19, 1960. We shall refer to the pleadings in their proper context to the extent they bear on the controversy before us. Issues were framed and the parties went to trial. They led "considerable" evidence, but during the course of the trial they drew up certain "consent terms" on October 7, 1964 and limited the trial to them. Those terms have formed the basis of the decision at the trial and in the appeal. It seems there was some controversy regarding the admissions contained in the consent terms, and we have accepted the interpretation concurrently placed on them by both courts. The appellate court has summarised its findings on paragraph II(b) of the consent terms as follows,contents of this paragraph leave much to be desired. But three things are clear from this paragraph (1) that in deciding issue No. 1 (we are concerned with issue No. 2 now) the Court had to assume that there had been some misfeasance or malfeasance (there is no case of non-feasance anywhere pleaded) on the part of persons handling the case No. 249, that is to say, the employees of the Port Trust. In other words, the element of negligence on the part of the employees of the Port Trust was admitted. (2) It is also admitted that those employees were appointed under the said Act. (3) The defendants merely alleged that they were employees while the plaintiffs alleged that they were employees as well as the agents of the Trust and that this side issue will have to beHigh Court has given its interpretation of paragraph II(c) also in regard to the applicability of bye-law No. 82 to the benefit ofbut it does not really matter in the view we have taken of the case in other respects. The High Court took note of the fact that the loss or damage to the goods was not pointed out by the plaintiffs or acknowledged by the Docks Manager before the removal of the goods from the docks with reference to by e-law No. 98. That court however noticed the fact that both parties had agreed that if damages were to be awarded, the amount thereof should be Rs. 35, 000. As regards evidence, it was agreed that, except as indicated in the preceding terms of consent, no other evidence "hitherto" recorded would be taken into consideration in the future proceedings in the suit or for decision of the remaining issues. That led the High Court to observe that the parties somewhat narrowed down the controversy by confining it to the points of law, and the learned Single Judge decided the case only upon those points of law which were referred to in theHigh Court, in appeal, took the view that the principal and substantial point before it was the true scope and effect of section 61B and paragraph 2 of section 87 of the Act. It arrived at a number of conclusions with reference to those provisions, namely, that the plaintiffs founded their claim upon the breach of statutory duty under section 61B also, that the provision of paragraph 2 of section 87 was upon a totally different subject with which section 61B was not at all concerned, that the liability of the Board was that of a bailee, that a master or employer was always liable for all torts committed by the servant provided it was in the course of his employment and that any other view of paragraph 2 of section 87 would render the provision of section 61B nugatory. In reaching its conclusions the High Court relied heavily on its Division Bench decision in Gulam Hussain Ahmedadi &Co. Pvt. Ltd. v. Trustees of the Port of Bombay.We shall examine whether these conclusions of the High Court are correct and whether it was justified in upholding the judgment and decree of the trial court and dismissing the appeal.

Court's reasoning:
In reaching that conclusion the High Court noticed the obvious facts that in paragraph II(b) of the consent terms the trial court was required to assume that there was some misfeasance, malfeasance or non-feasance of the persons handling case No. 249. The High Court also noticed the two further facts (i) that there were three clear heads under which torts could be classified, and by using them in paragraph 2 of section 87 of the Act, "the Legislature provided for immunity of the Port Trust from torts committed by its employees", and (ii) that in so far as the plaintiffs claim in tort was concerned there could be no doubt that "it would fall within the ambit of paragraph 2 of section 87 because misfeasance, malfeasance or nonfeasance (was) specificallysection thus makes it clear that, for purposes of the present case, the responsibility of the Board was that of a bailee under the three sections of the Contract Act, and noeven though there was no contractual bailment either according to the pleadings of the parties. or on the wordings of section 61B, the responsibility of the Board was of the nature aforesaid, as the bailee of the consignment by virtue of that section. In other words, in so far as the "responsibility" of the Board for the loss, destruction or deterioration of the goods of which it had taken charge was concerned, it was clearly that of a bailee, subject of course to the reservations provided by themay be mentioned that we have gone through the pleadings and there is no justification for the view that the plaintiffs based their claim on the breach of a mere statutory duty of the Board under sectionfollows, therefore, that as the claim in the present case was not based upon a mere breach of statutory duty under section 61B of the Act, and was based on the Boards liability as bailee, it was no other than by way of an action inmay be that, as in the present case, certain obligations were fastened on the Board under section 61B of the Act which were not in truth contractual in as much as they did not rest on agreement, but which, by virtue of the same section, were to be treated as if the y were so, and were made the subject-matter of liability under three sections (sections 151, 152 and 162) of the Contract Act. Such a relationship may well be called as one arising out of an implied contract. But that does not justify the view of the High Court that an altogether new cause of action arose merely because a duty to take charge of the landed goods was cast on the Board under section 61A(1) and the Boards responsibility for them was defined in section 61B. By the very nature of that relationship, which admittedly did not arise out of agreement between the parties, it was essentially a delictalwould thus appear that it was not the case of the plaintiffs in their pleadings that their claim was founded merely upon the breach of the statutory duty under section 61B of the Act, apart from tort. O n the other hand. in their notice before the suit, the plaintiffs case was based on negligence, malfeasance and non-feasance on the part of the Boards administration at the docks and/or the acts of misconduct on the part of its employees. As ha s been pointed out, in the plaint the claim was based on careless handling by the defendants when the case slipped and fell while it was being removed by them as baileesSo when the action was by way of tort, and was, at any rate, rested on sect ion 61B, it was necessary for the High Court to give full meaning to what that section provided and to give effect to paragraph 2 of section 87 if it had a bearing on that section as was canvassed at length all through theHigh Court went on to hold that in its opinion one and the same act may give rise to two liabilities, one for breach of statutory duties and the other for the commission of a civil wrong or a tort and that while section 61B provides for the former, paragraph 2 of section 87 pro vides for the latter and the two provisions do not overlap. No justifiable reason has been given for this view and, if we may say with respect, we find that it runs counter to the clear provisions of the two sections if they are read together, and is wholly unsustainable. It is section 61B which deals with and prescribes the responsibility of the Board for goods of which it has taken possession under the statutory duty under section 61A, and it is that section, namely, section 61B, which makes that responsibility "subject to the other provisions of (that) Act". There is no occasion or justification for reading the clause regarding the subjection to the other provisions of the Act so as to exclude section 87 as if it were outside theif it could be shown that the acts of misfeasance, malfeasance and non-feasance compendiously used at the trial and in the consent terms, were committed by any employee appointed under the Act, there is n o reason why the Board should not invoke paragraph 2 of section 87 and successfully claim that it was not responsible forthe High Court clearly reached that conclusion, it was a short and inevitable step for it to hold, further, that the Board was therefore entitled to be absolved of its liability for the acts of these employees by virtue of paragraph 2 of section 87. So here again the High Court fell into an error for which its judgment cannot berespect, we are unable to find any justification for such a view. Gulam Hussains case (supra) was therefore not decided on a proper appreciation of the provisions of section 61B and paragraph 2 of section 87 of the Act. One of the Judges who decided that case was the Judge who tried the present case, and he naturally followed his own earlier judgment in Gulam Hussains case (supra). As the Division Bench, which gave the present judgment (under appeal before us) in that very case held that the conclusion reached in Gulam Hussains case (supra) was binding upon it, it fell into the error which had crept in the initial decision in Gulam Hussains case (supra). Gulam Hussains case (supra) is therefore no authority or basis for upholding the impugned judgment.It has to be appreciated and remembered all through. that section 61B which imposes the responsibility on the Board foror deterioration of goods of which it has taken charge, and states that that responsibility shall be that of a bailee under the three sections of the Contract Act, states further that the responsibility shall be "subject to the other provisions of (the) Act". So the so-called statutory duty is not unequivocal, and even if it were assumed that it took the case outside the purview of the law of torts and made it what Salmond has classified a s an "innominate obligation", that would not take the case out of the exception provided by paragraph 2 of section 87. Sections 61B and 87 are both parts of the same statute, and must be read together-particularly when that is the clear direct ion of section 61B. By virtue of that section, the liability of the Board is no more than that of a bailee under sections 151, 152 and 161 of the Contract Act. As we have pointed out, bailment is a concept correlated to possession, and w hen that is admittedly not contradicted in this case, it is really a liability in tort and the so- called liability under section 61B of the Act means no more and no less thanHigh Court has observed that any other view would "virtually render the provisions of section 61B largely nugatory". But the very next sentence gives out the reason for that view, for the High Court has gone on to observe that that would be so if paragraph 2 of section 87 is construed otherwise, namely, that "for any and every misfeasance, malfeasance or non-feasance of its employee, the Board is given complete immunity." That, however, is not what section 61B and paragraph 2 of section 87 provide for, as we have pointed out earlier, only a very few of the Boards employees are appointed under the Act and all that the paragraph provides is that the Board shall not be responsible for any misfeasance, malfeasance or non-feasance on the part of only those employees. They m ay, for aught one knows, be responsible personally for what they do, but it is not a correct proposition of law to say that the view which has found favour with us would virtually render the provisions of section 61B "largelythe view we have taken, it is not necessary for so to examine the validity of the bye-laws to which reference has been made by the High Court. They were produced before us towards the close of the hearing, for the arguments proceeded and were based on the true meaning and construction of sections 61B and 87 (paragraph 2) and it was agreed that our decision thereon would govern the fate of this case. We should not therefore be taken to have expressed any opinion about the validity of the bye-laws in question. It will be sufficient for us to say that the decision here or below will not be conclusive of their validity or invalidity for purposes of the present case or like controversy.