Case: The East And West Steamship Company,George Town, Madras Vs. S. K. Ramalingam Chettiar.(And Connected Appeal)

2. The appeal from the Madras High Court was in respect of a consignment of 90 bundles of brass circles which were consigned to the respondent at Madras from Bombay to Madras per S. S. Fakira a Steamer belonging to the East and West Steamship Co. The Ship arrived in Madras onand 78 out of the 90 bundles were delivered onto the appellant through his clearing agent the second respondent. Five more bundles were delivered onAfter some correspondence between the Shipping Company and the first respondent regarding the seven bundles not delivered the appellant company repudiated finally the respondents claim onThe first respondent brought the present suit onas compensation0 for the value of the undelivered goods and Rs.as the profit of which he had been deprived. The claim for this amount of profit was given up at the trial. The appellants defence was: (1) that the suit having been filed beyond the period prescribed in cl. 6 of Art. III of the Act; (2) that the suit was also barred as no claim had been made within the period of one month from the date of arrival of the vessel as stipulated in the bill of lading and (3) that the goods were insufficiently packed and therefore carrier was not liable for the alleged loss. The learned Judge of the Small Causes Court who tried the suit as also the Judge who heard the matter on a new trial application held that the plaintiffs right to claim to compensation was extinguished before the date of the suit.3. As regards the second defence based on the stipulation in the bill of lading that notice has to be given within one month the trial Court held that this term in the bill of lading was void and of no effect. The learned judges who heard the new trial application disagreed with this and accepted the defence on this point also. In the result they dismissed the new trial application and confirmed the order of dismissal made by the learned trial Judge. Against this order the High Court of Madras was moved by the plaintiffs under section 115, Civil Procedure Code. The learned Judge held that the term in the bill of lading as regards one months notice was repugnant to Rule 8 to Art. III of the Schedule to the Act and was void. He was also of opinion that the date of the final repudiation of liability by the Shipping company as regards the short delivery oris the date "when the goods should have been delivered" within the meaning of the 3rd clause of the 6th paragraph of Art. III and so whether this clause provided for extinction of a right or only prescribed a rule of limitation the defence based on this clause of the Act could not succeed. He expressed his own opinion, however, that this clause did not provide for extinction of the right but merely prescribed a rule of limitation. In view of his conclusions he set aside the decision of the lower courts and remanded the suit for further disposal to the trial court. After remand the trial court ondecreed the suit for a sum of Rs.Against that decree no steps were taken by the Shipping Company. It was after that date that the Shipping Company applied for and obtained from this Court special leave to appeal onIt has to be noticed that as the decree made in the suit has become final and unassailable, this appeal is really of academic interest. In view however of the fact that the main question of law raised, viz., as regards the scope and interpretation of the 3rd Clause of para. 6 of Art. III of the Schedule to the Act is being raised before us in other two appeals from the Bombay High Court also we have heard the counsel for both sides in this appeal in full.4. Of the two appeals from Bombaythe one Civil Appeal No. 92 of 1958 is in respect of some consignments at Bombay by S. S. Tweedsmuir Park, S. S. Finnamore Hill and S. S. Ismaliaall vessels belonging to the first defendant the British India Steam Navigation Company Ltd. S. S. Tweedsmuir and S. S. Finnamore Hill arrived in the port of Bombay on or about September 10, 1948, and steamer Ismalia arrived in Bombay on September 6, 1948. The vessels discharged their cargoes along side on to the docks belonging to the Trustees of the Port of Bombay. The plaintiff took delivery of the goods packed in bags which bore their distinctive and identifying marks, but were unable to obtain delivery of 164 bags out of the consignment sent by Ismalia, 869 bags out of the consignment sent by Finnamore and 1657 bags out of the consignment sent by Tweedsmuir Park. The suit was brought on a claim of Rs.for the bags not delivered. The Trustees of the Port of Bombay were also made defendants. We are no longer concerned with them as after the suit was dismissed by the trial Judge against both the defendants the plaintiffs did not prefer any appeal against the order of dismissal as against the trustees.5. The main defence of the first defendant, the Shipping Company was that the company was discharged from all liability in respect of the loss or damage alleged in the plaint by reason of the provisions of the Act inasmuch as the suit had not been brought within one year of the date "when the goods should have been delivered". Another defence was that the company was not liable as no notice within 3 days after discharge and before goods were removed from the quay or ships side or place of discharge had been given and so in view of clause 20 of the bill lading the company was free from all liability. The trial judge held that in view of the fact that S. S. Finnamore Hill completed discharging her cargo on 19th September, 1948, S. S. Ismalia completed discharging her cargo on 25th September, 1948, and S. S. Tweedsmuir Park completed discharging her cargo on 27th September 1948, the suit was clearly not brought "within one year" from the date "when the good should have been delivered". He held there fore that the defendants were discharged form all liability by reason of the provisions of the Act. Accordingly he dismissed the suit. In appeal from this order of dismissal the plaintiffs contended that Art. III (6) did not deal with cases of loss or damage arising fromof goods; in the alternative it was contended that the expression "loss or damage" in Art III (6) must be limited to the loss or damage to the goods themselves and if the goods have not been lost this clause had no application. The learned judges of the High Court rejected both these contentions. They were of opinion that Art. III (6) deals with all cases of loss or damage whether the loss or damage is caused by the deterioration of the goods or is caused by theof the goods and further that "the loss or damage" as used was used by the Legislature to include any loss or damage caused to shipper or consignee in respect of which he claims compensation from the shipping company. The learned judges also held that so far as the shipping company was concerned the delivery of goods is given or ought to be given as soon as the goods are landed and therefore in this case the goods with regard to the three ships having been cleared on September 19, 1948, September 25, 1948, and September 27, 1948, respectively. These were the dates on which the goods "should have been delivered" for the purposes of the application of the 3rd clause of paragraph 6 of Art. III. Accordingly agreeing with the trial Judge that the liability of the shipping company was discharged and the suit was not maintainable they dismissed the appeal.6. The other appeal from the Bombay High court, viz., Civil Appeal No. 91 of 1958 is in respect of a consignment of 6000 bags of cocoanut from Cochin and 4733 bags of copra and cocoanuts from Badagara consigned to the plaintiffs for carriage to Bombay by the steamer "Bharatjal" belonging to the appellant the Bharat Lines Ltd. The steamer arrived in Bombay Port some time in the middle of September 1948. The plaintiffs however failed to obtain delivery of 596 bags from the Badagara consignment and 470 bags from the Cochin consignment. They brought the suit on December 5, 1949, against the shipping company the Bharat Lines Limited, and also against the Trustees of the Port of Bombay on a claim of Rs.on which Rs.appear to have been claimedin respect of the bags not delivered and the remainderor damage to the goods in the bags of which delivery was taken. We are no longer concerned with the second defendant the Trustees of the Port of Bombay as after the suit was dismissed by the trial Court the plaintiffs did not pursue the claim against them.

Court's reasoning:
18. It is worth noting in this connection that while paragraph 5 makes it clear that loss there means loss to the carrier and paragraph 8 speaks of loss or damage to or in connection with the goods, the Legislature has in the 6th paragraph of this Article left the words "loss or damage" unqualified. The object of the rule however being to give immunity to the carriers and the shippers from claims of compensation made by the owners of the goods in respect of loss sustained by them it will be unreasonable to read the word "loss" in that paragraph as restricted to only loss "of the goods". When the object of this particular paragraph and the setting of this paragraph in the Article after the previous paragraphs are considered there remains no doubt whatsoever that the learned judges of the Bombay High Court were right in their conclusion that the loss or damage in this paragraph is a wide expression used by the Legislature to include any loss or damage caused to shipper or consignee in respect of which he makes a grievance and in respect of which he claims compensation from the shipping company.19. The argument that loss due to failure to deliver the goods is not covered by this clause is merely to be mentioned to deserve rejection. The very use of the words "the date on which the goods should have been delivered" clearly contemplates a case where the goods have not been delivered. The clause gives the owner of the goods one years time to bring the suitthe year to be calculated from the date of the delivery of the goods where the goods have been delivered and from the date when the goods should have been delivered where all or some of the goods have not been delivered. The fact that the first clause of the 6th paragraph speaks of removal of the goods may be an argument for thinking as the Bombay High Court thought that that clause has no application when goods are notmay be mentioned that some authorities (See Carvers Carriage of Goods by Sea, 10th Edn., p. 191) have suggested that the first clause of this paragraph appears to have little meaning. That is a matter which need not engage our attention. It is sufficient to mention that the fact that the rule of evidence provided in the first clause of the paragraph may have no application to cases tois wholly irrelevant in deciding whether the third clause applies to cases ofAs we have already said the date when the goods should have been delivered necessarily contemplates a case where loss has arisen because goods have not been delivered.This case it has to be noticed had to consider in view of the special terms of an insurance policy, whether there was a total or partial loss for the purposes of claims under the policy and the argument that there was a total loss within the meaning of the policy because it was impossible for theto deliver the plaintiffs own bales of cotton to them was rejected. This case is of no assistance in the interpretation of the word "loss" in the Articles of the Schedule.23. There is nothing however to justify the conclusion that the consignee is bound to avail himself of the right to claim as tenant in common. The breach of contract remains and the claim for compensation for such breach is in no way affected. Neither authority nor principle therefore supports the contention of the learnedthat where the goods are in existence but cannot be delivered because they have been mixed up with the cargo of other owners there has been no "loss" within the meaning of the third clause of the 6th paragraph of Art. III.24. On the first question, therefore we have come to the conclusion that the word "loss" in the third clause of the 6th paragraph of Art. III to the Act means and includes 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 befind it difficult to draw any reasonable distinction between the words "absolved from liability" and "discharged from liability" and think that these words "discharged from liability" were intended to mean and do mean that the liability has totally disappeared and not only that the remedy as regards the liability has disappeared. We are unable to agree with the learned Judge of the Madras High Court that these words merely mean that "that eve though the right may inhere in the person who is entitled to the benefits, still the liability in the opposite party is discharged by the impossibility of enforcement." The distinction between the extinction of a right and the extinction of a remedy for the enforcement of that right, though fine, is of great importance. The Legislature could not but have been conscious of this distinction when using the words "discharged from all liability" in an Article purporting to prescribe rights and immunities of the shipowners.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 acknowledgement of liability thereafter.On the next question whether this clause prescribes only a rule of limitation or provides for the extinction of a right to compensation, it will be observed that the Bombay High Court has not discussed it at all, apparently because on the facts of the case before it, it would have mattered little whether the provision was one of limitation or of extinction of right. The question is however of some importance in the facts of the Madras case. For if the provision is one of limitation there would be some scope for argument in the facts of that case that the period was extended by acknowledgments of liability within the meaning of Art. 19 of the Limitation Act. Thewe have to decide is whether in saying that the ship or the carrier will be "discharged from liability", only the remedy of the shipper or the consignee was being barred or the right was also beingIt is useful to remember in this connection the international character of these rules, as has been already emphasised above. Rules of limitation are likely to vary from country to country. Provisions for extension of periods prescribed for limitation would similarly vary.We should be slow therefore to put on the word "discharged from liability" as interpretation which would produce results varying in different countries and thus keeping the position uncertain both the shipper and theQuite apart from this consideration, however, we think that the ordinary grammatical sense of "discharged from liability" does not connote "free from the remedy as regards liability" but are more apt to mean a total extinction of the liability following upon an extinction of the right.Wefind it difficult to draw any reasonable distinction between the words "absolved from liability" and "discharged from liability" and think that these words "discharged from liability" were intended to mean and do mean that the liability has totally disappeared and not only that the remedy as regards the liability has disappeared. We are unable to agree with the learned Judge of the Madras High Court that these words merely mean that "that eve though the right may inhere in the person who is entitled to the benefits, still the liability in the opposite party is discharged by the impossibility of enforcement." The distinction between the extinction of a right and the extinction of a remedy for the enforcement of that right, though fine, is of great importance. The Legislature could not but have been conscious of this distinction when using the words "discharged from all liability" in an Article purporting to prescribe rights and immunities of the shipowners.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 acknowledgement of liability thereafter.s brings us to the question as to how the date "when the goods should have been delivered" should becalculated. References were made at the Bar to some of the numerous decisions in the different courts in India as regards the interpretation of somewhat similar words in Art. 31 of the Limitation Act in respect of suits for recovery of compensation forIndeed the learned Judge in the Madras High Court himself has based his conclusion on this question on the view of law he had earlier expressed as regards Art. 31 of the Limitation Act that the starting point of limitation there is the final repudiation of the liability by the company. With great respect to the learned Judge we are of opinion that the cases as regards the ascertainment of the date when the goods "ought to be delivered" as used in Art. 31 of the Limitation Act are of no assistance for our present purpose. Most, if not all of the cases which have considered the question of the ascertainment of the date when the goods "ought to be delivered" for the purpose of Art. 31 deal with cases of transport by Railways where no date has been or can be specified in the contract for carriage. We cannot however ignore the fact that the conditions of carriage of goods by ship are essentially different from contracts of carriage of goods by Railway in one respect, viz., that whereas in contracts of carriage of goods by Railways there is ordinarily no knowledge as to by which particular train the goods will be despatched nor is there any undertaking by the Railways as regards such trains, there is ordinarily in contracts of carriage of goods by sea a distinct arrangement that the goods will be shipped by a particular vessel.In these appeals we are not concerned with the facts of these terms of delivery of contract except that they show that it is clearly understood between the parties to the contract that delivery is to commence as soon as possible after the arrival of ship at port and completed before the ship leaves the port. Indeed even if there were no definite terms in the bill of lading as regards the delivery it would follows necessarily from the very nature of the carriage of goods by ship that the delivery of the cargo carried by the ship should be made between the date of the arrival at the port and its departure from the port. For our present purpose it is unnecessary to consider whether delivery to the dock authority in any of these cases was or would have been equivalent to the delivery to the consignee. That would depend upon the custom of the port of discharge or on statutory provisions or express stipulations in the bill of lading.But whether the delivery is to be made to the consignee or to anybody else on his behalf the duty of the ships master is to start the delivery as soon as possible after the ships arrival at the port and to complete it before the date of departure from the port. Before the ship had actually left the port it is not possible to say that the time when delivery should be made has expired. Once however the vessel has left the port it cannot but be common ground between the carrier and the consignee that the time when delivery should have been made in over. It is this point of time, viz., the time when the ship leaves the port, which in our opinion should be taken as the time when the delivery should have been made. The fact that after this point of time correspondence started between the carrier and the consignee as regards the failure to deliver and at a later point of time the carrier communicates his inability to deliver cannot affect this question. Nor can the ultimate repudiation of any claim that may be made by the shipper or the consignee affect the ascertainment of the date when the goods should have been delivered. The arrival at port of the vessel by which the goods have been contracted to be carried being known and the departure being equally an ascertainable thing and the duty of the carrier being necessarily to complete the delivery before leaving the port, the date by which the delivery should have been made is already a fixed point of time and later correspondence, claims or repudiation thereof an in no way change it.29. We have therefore come to the conclusion that whatever be the proper mode of ascertaining the date when delivery "ought to be made" under Art. 31 of the Limitation Actwhether that be the reasonable time for delivery in the circumstances of the case or the date when after correspondence the carrier intimates its inability to deliver or the date of the final repudiation of the claim on a claim for compensation having been made or in the case of part delivery the date when the bulk of the consignment was deliveredthe date when the goods should have been delivered for the purpose of the Third Clause of the 6th paragraph of Art. 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.30. Applying the above clause to the facts of the cases before us it is obvious that these suits for compensation were not maintainable. It is hardly necessary therefore to consider the additional defence raised in all the three suits by the Shipping companies, viz., that the claim for compensation not having been made within thirty days from the date of arrival of the vessel in accordance with the terms of the bill of lading no compensation is payable. The learned Judges of the Bombay High Court did not think it necessary to consider this additional defence as they accepted the defence based on the third clause of the 6th paragraph of Art. III which has been discussed above.The learned Judge in the Madras High Court had however to consider this additional defence in view of his conclusions against the shipping company on the other defence. He held that the stipulation in the bill of lading that if no claim for compensation is made within thirty days from the date of arrival of the ship the shipping company will not be liable for compensation is void as it offends against para. 8 of Art. III.It cannot be seriously disputed that the stipulation under consideration does directly offend against the provisions of the 8th paragraph. For it seeks at least to "lessen", otherwise than provided in the rules in the Schedule the liability of the ship or carrier for loss of damage to goods or in connection with goods caused by the failure to deliver. This stipulation requiring claim for compensation being made within one month from the date of arrival of the ship is therefore null and void.32. Though the additional defence raised by the shipping companies must therefore fail, the main defence, as we have already found, succeeds. None of the suits were brought within a year from the date when the ship carrying the goods left the port of discharge. We therefore dismiss with costs the Civil Appeals Nos. 91 and 92 of 1958 and confirm the order of dismissal made by the Bombay High Court. One set of hearing costs will have to be paid.