(Prayer: Original Side Appeal is filed under Order XXXVI Rule 1 of the Original Side Rules read with Clause 15 of the Letters Patent against the Judgment and decree dated 2.11.1998 made in C.S.No.11 of 1990 on the file of this Court.)
1. Being aggrieved by the Judgment and Decree in C.S.No.11 of 1990 holding that Appellant ? Madras Port Trust is liable to pay a sum of Rs.28,21,979/- and directing the Appellant to pay interest at the rate of 6% per annum from the date of suit till the date of realisation for the alleged damage caused to the consignment - Automatic Cycle Internal Grinder with extra toolings and spares, Madras Port Trust-2nd Defendant has preferred this Appeal. Since most of the facts are not in controversy, we are not elaborately referring to the pleadings as well as the evidence and we shall refer only to that part of the pleadings and the evidence to focus the points involved for decision in the Appeal.
2. The 1st Plaintiff is Public Limited Company having its Office at Jaipur and the 2nd Plaintiff is limited Insurance Company incorporated in Japan. A consignment consisting of two cases of Automatic Cycle Internal Grinder for Grinding Bore of Bearing Races with Extra Toolings and Spares was entrusted to the 1st Defendant ? Mitsuit O.S.K.Lines Limited, Japan for safe carriage by sea. The consignment was sent in the vessel M.V. KARINA BONITA and the vessel arrived at Madras Port on 5.4.1989 and berthed on 6.4.1989. Vessel M.V. KARINA BONITA discharged two cases of Automatic Internal Grinder with spares on 9.4.1989. The Steamer Agent of 1st Defendant ? M/s.International Clearing and Shipping Agency signed in the Import Tally sheet-Ex.D3. The consignment was in the custody of 2nd Defendant-Madras Port Trust as statutory agent.
3. Case of Plaintiffs is that at the time of taking delivery, the consignment was extensively damaged. Further case of Plaintiffs is that the 1st Plaintiff was informed by the 1st defendant / carrier that the said damages was due to hitting of wagons while shunting the consignment on 12.4.1989. Case of Plaintiffs is that the damage was due to the negligence/misconduct of the employees of the 2nd Defendant and the damage was surveyed. The damaged consignment was auctioned through auctioneer ? Murray & Co., and after deducting salvage value of Rs.3,60,338.50ps, the loss comes to Rs.28,10,325/-. Adding other expenses, Plaintiffs claim total loss of Rs.28,21,979/-. According to Plaintiffs, 1st Defendant ? carrier at Sea is legally bound to deliver to the 1st Plaintiff the consignment in good condition in which it was entrusted to it by the consignor at Japan and having failed to do so, the Sea carrier is liable to pay the loss.
4. It is the further case of Plaintiffs that the 2nd Defendant annotated the receipt of the consignment at the time of discharge from the vessel and trying to avoid the liability and the entire damage had occurred due to the negligence of the 2nd Defendant ? Port Trust. The 1st Plaintiff is not in a position to pinpoint as to who would be liable for the above said damage and hence the suit has been filed against both the Defendants. The 2nd Plaintiff Insurer ? a limited liability Company incorporated in Japan paid the insured value of the consignment and got subrogated to the rights of the 1st Plaintiff. To avoid any technical objection, both the Plaintiffs have joined and filed the suit.
5. The 1st Defendant ? Carrier at Sea resisted the suit inter alia contending as follows:-
The cargo was carried by the vessel with due diligence and the ship arrived at the Port of Madras on 5.4.1989 and two cases were discharged from the vessel into the custody of the 2nd Defendant on 9.4.1989. At the time of discharge from the vessel, both the cases were in good order and condition. According to the 1st Defendant ? Sea Carrier, even according to Tally Receipts issued by the 2nd Defendant, there was no damage to the contents of the two cases at the time of discharge from the vessel on 9.4.1989. As per Section 42(7) of the Major Port Trusts Act, only the 2nd Defendant is liable for any loss or damages occasioned to the consignment after the discharge of the cargo from the vessel. Subsequent to the discharge of the cargo from the vessel and after the 2nd Defendant had taken charge of the same, one of the two cases was not removed to a Warehouse, but was shifted to the open road side of Jawahar Docks No.5 very close to the Railway track. During the first shift, on 12.4.1989, while the railway wagons carrying Cement were being shifted by the employees of the 2nd Defendant, it caused the wagon hit against the consignment resulting in extensive damage to case No.1. By letter dated 13.4.1989, local agents of the 1st Defendant brought it to the notice of the Traffic Manager of the Port Trust. According to the 1st Defendant, the alleged damage was caused only subsequent to the discharge of the cargo from the vessel and while the goods were in the custody of the 2nd Defendant and the plaintiffs' remedy, if any, can therefore be enforceable only against the 2nd Defendant and the suit against the 1st Defendant is misconceived. According to the 1st defendant, in any event, the 1st Defendant's principal place of business is in Japan and as the cargo was shifted from Port in Japan it is only the Japanese Carriage of Goods by Sea Act would govern the contract of carriage and under the provisions of the said Act, the maximum liability of the 1st Defendant cannot exceed Japanese 100,000 and the suit is liable to be dismissed as against the 1st Defendant.
6. The 2nd Defendant Port Trust resisted the suit contending that even at the time of discharge from the vessel S.S. KARINA BONITA on 9.4.1989, in the Import Tally Sheet, the consignment was annotated as "Planks Broken (PBKN)". The qualified receipt with annotation has been acknowledged and accepted by the 1st defendant without objection or demur and therefore having acknowledged receipt of the nature of the consignment, when it landed, the 1st Defendant is estopped from contending that the damage had occurred due to the negligence of the 2nd Defendant.
7. Case of 2nd Defendant-Port Trust is that the consignment already landed in a damaged condition as is evident from annotation in the Tally Sheet "PBKN". Further case of Port Trust is that Clearing Agent of the 1st Plaintiff applied for Port Trust's survey of the suit package only on 19.5.1989 after a lapse of more than one month and since the request for survey was made within time, Port Trust is not obliged to conduct the Survey in respect of goods ,which have been discharged in a damaged condition. The application for survey was time barred under Section 43(2) of the Major Port Trusts Act, 1963. As there was heavy congestion of cargo already discharged, the suit consignment had to be stacked on the road side adjacent to the transit shed, where they are normally stacked when there is congestion. On 12.4.1989, during the course of railway wagon movement, the site of one of the wagons came into contact with already protruding broken planks of the suit package and thereby brushing its side planks. Case of Port Trust is that the impact of the wagon was not severe or direct. Case of Port Trust is that it has rendered service to the consignment in good faith and has taken all precautionary measures as is expected of a bailee. The survey report would show that the package of the suit consignment was insufficient for carriage by Sea and therefore, 2nd Defendant is not liable or answerable for the deficiencies or damages caused by insufficient packing under Regulation 32 of the Madras Port Trust General Regulations. M/s. South India Shipping Services (SISS) the Clearing Agent of the 1st Plaintiff filed Import Application No.31/251 dated 29.4.1989 but cleared the consignment only on 28.7.1989. According to the Port Trust, it was not a party to the alleged independent survey by the Plaintiffs and no notice was given to Port Trust on any such independent survey and such independent survey is not binding on the 2nd Defendant. According to the Port Trust, since the consignment discharged was PBKN and the extent of damage to the materials inside the package at the time of landing was not known, the 2nd Defendant cannot be made liable to the extent of alleged damage as provided under Regulation 31 of Madras Port Trust General Regulations.
8. On the above pleadings, before the learned single Judge, the following issues were framed:
"1. Is the suit as framed not maintainable against the first Defendant?
2. What was the condition, quality and quantity of the cargo that was actually loaded on board the ship M.V. KARINA BONITA at the Port of shipment?
3. Did not the first defendant vessel discharge the two cases in good order and condition?
4. Did not the alleged damage to the two cases occur due to the negligence of and while in the custody of the second Defendant?
5. Did the plaintiffs suffer loss to the extent of Rs.28,21,979/- and if so are the plaintiffs entitled to claim the amount from this Defendant?
6. Is not the liability of the first Defendant restricted to 1,00,000 per package?
7. Whether the Plaintiff is entitled to a decree, if so, at what amount?
- and -
8. To what reliefs, if any, are the parties entitled?"
9. Before the learned single Judge, onbehalf of the plaintiffs, the Surveyor in M/s.Wilson & Company was examined as P.W.1 and Exs.P.1 to P.40 were marked. Onbehalf of the defendants, Operating Assistant in 1st Defendant's Steamer Agent was examined as D.W.1. The photographer, who took Ex.D.1 series of photographs was examined as D.W.2, an Assistant Traffic Manager of Madras Port Trust was examined as D.W.3 and Exs.D.1 to D.5 were marked.
10. Upon consideration of the oral and documentary evidence, referring to Ex.D.3 ? Import Tally Sheet and observing that as against the Case weighing 4800 kgs no mark or annotation of "PBKN" was made, the learned single Judge held that the damages to the machinery ? consignment has been caused only after landing and that the 1st Defendant ? Sea Carrier cannot be held responsible for the damage caused to the consignment and accordingly answered Issue Nos.3 and 4. In so far as the 3rd Issue, the learned single Judge held that the 1st Defendant discharged the two cases in good order and condition and on Issue No.4, it was held that the alleged damage to the two cases occurred due to the negligence and while in custody of the 2nd Defendant. The learned single Judge rejected the 2nd Defendant-Port Trust defence plea that the damage was caused even before landing. Pointing out that there was serious lapse on the part of the employees of the 2nd Defendant in keeping the consignment in such a way as to get dashed against by the Railway Wagon movement, the learned single Judge observed that the legal aspects regarding Bailor and Bailee relationship pales into insignificance. Based upon Ex.P.15 ? claim bill and other expenses, the learned single Judge held that after deducting salvage amount, the 2nd Defendant is liable to pay Rs.28,21,979/- and accordingly answered Issue No.5 and decreed the suit as stated in paragraph No.1 of this judgment.
11. Challenging the impugned judgment, the learned counsel for the Appellant Port Trust Mr.Karthikeyan interalia raised the following submissions:
?In documents Exs.P.10, P.11 and P.12 and Exs.D.3 and D.4, both the Cases were annotated as "planks broken" and those documentary evidence were not properly appreciated by the learned single Judge.
The learned single Judge erred in holding that the annotation "PBKN" relates only to the Case weighing 2320 Kgs and not the Case weighing 4800 Kgs. In Ex.P.1 ? Survey Report and Ex.D.3 ? Tally Sheet it is clearly stated that the case containing 4800 Kgs was annotated as "Planks Broken" and the learned single Judge ought to have held that the inner machine might have been damaged even before landing in the Port.
As per the auctioneer's opinion, the machinery is sophisticated and there was no precautionary note on the consignment "to handle with care" and in the absence of any such precautionary note, Port Trust cannot be held liable. The Steamer Agent is a Bailor and Port Trust is the Bailee and in view of the annotation, "PBKN" recorded, the 1st Defendant is liable or in any event, there is a joint liability.
Fixing the quantum of damages at Rs.28,29,979/- is without any basis.?
12. Mr.Bijai Sunder, learned counsel for 3rd Respondent-vessel owner contended that the Cargo was carried by Vessel M.V. KARINA BONITA with due diligence and damage was caused subsequent to the discharge of the Cargo at Madras Port. Learned counsel would contend that the responsibility of the vessel owner is "tackle to tackle" i.e. "Port to Port" and once the goods are landed in Madras Port, no liability could be fastened to the ship owner. Learned counsel would further contend that in any event Japanese Carriage of Goods by Sea Act would be applicable and that the liability of 3rd Respondent-ship owner cannot exceed Japanese Yen 100,000.
13. Learned counsel for Respondents 1 and 2/Plaintiffs contended that as per Ex.D3-Import Tally Sheet, Cases containing the Automatic Cycle Internal Grinder was not annotated. Learned counsel for Respondents 1 and 2 mainly contended that the consignment was discharged in good condition and the damage caused to the consignment was not due to any defective packing but only due to the negligence of the employees of Port Trust. It was further contended that as per Sec.43 of Madras Port TrustS Act, the responsibility of the Port Trust is like that of Bailee under Sections 151,152 and 161 of Indian Contract Act and Port Trust is to exercise due care and prudence in taking care of the goods. But contrary to the responsibility cast upon the Port Trust, the Cargo was moved to the open yard and kept near the rail track and railway wagon dashed against the Cases and the Cargo was extensively damaged and upon analysis of oral and documentary evidence, learned single Judge has rightly held that Madras Port Trust-2nd Defendant is liable for the damage and directed payment of Rs.28,21,979/- with interest.
14. Upon analysis of the material on record, consideration of the impugned Judgment and the rival contentions, the following points arise for determination:
"1. Whether as contended by the 1st defendant, the consignment was discharged in good condition or whether as contended by the appellant ? Port Trust the consignment containing 4800 Kgs was discharged in "Planks Broken" (PBKN) condition?
2. Whether the damage to the goods occurred due to the negligence while in the custody of 2nd defendant?
3. Whether the learned single Judge was right in holding the 2nd defendant Port Trust exclusively liable to pay damages of Rs.28,21,979/- along with interest?
4. Whether the Vessel owner (1st Defendant) and Madras Port Trust (2nd Defendant) are responsible for the damages caused to the consignment? If so, how the liability is to be apportioned amongst the Defendants 1 and 2?
5. To what relief, the parties are entitled to?
15. Point No.1:- The facts are not in dispute. Consignment of two Cases of Automatic Cycle Internal Grinder [One Case weighing 4800 Kgs. and another Case weighing 960 Kgs. with extra toolings and spares] were entrusted to the 1st Defendant for carriage by sea by 1st Defendant's Vessel M.V.KARINA BONITA. 1st Defendant's Vessel M.V. KARINA BONITA arrived at Madras Port on 05.04.1989 and discharged the consignment on 09.04.1989. Core question is whether 1st Defendant discharged two Cases in good condition or with annotation "PBKN".
16. Case of 1st Defendant is that Cargo was carried by the Vessel with due diligence and ship M.V. KARINA BONITA arrived at Madras Port on 05.04.1989 without disturbing storage at inter mediary Port. In his evidence, DW1-Ranganathan, employee of Steamer agent ? International Clearing and Shipping Agency [ICSA] has stated that at the time of discharge from the Vessel, both the Cases were in good order and condition. Case of 1st Defendant is that even according to the Tally Sheet issued by the Port, there was no damage to the contents of two Cases at the time of discharge from the Vessel on 09.04.1989. Per contra, case of Madras Port Trust is that Case No.1 of the suit consignment which was manifested to contain Automatic Cycle Internal Grinder weighing 4800 Kgs was discharged from the above Vessel in "Planks Broken" condition on 09.04.1989.
17. Accepting the contention of 1st Defendant, learned single Judge held that the consignment was discharged in good condition and that the damage to the main machinery had been caused only after landing. Learned single Judge held:- (i) As per Ex.D3 ? Import Tally Sheet, Case weighing 2320 Kgs had "Planks Broken" [PBKN] whereas against the Case weighing 4800 Kgs., no such remarks or annotation is made; (ii) on 09.04.1989 Vessel discharged the consignment in good condition and that the damage to the main machinery had been caused only after landing and 1st Defendant cannot be held responsible for the damage caused to the consignment by the Port.
18. In our considered view, learned single Judge was not right in holding that Case weighing 4800 Kgs. was not annotated as "PBKN". Finding of the learned single Judge that vessel discharged the consignment in good condition overlooks the clinching evidence showing that Case weighing 4800 kgs. was also annotated "PBKN". As per Sec.42(2) of Major Port Trusts Act, 1963, if so requested by the owner, the Board may take charge of the goods for the purpose of performing the service or services and shall give a receipt in such form as the Board may specify.
19. As per the then Manual of Instructions of Madras Port Trust 4.9 -
"Tally sheet is the document used for accounting of packages. Separate forms have been fixed (1) for tallying of Import Cargo (2) for tally of Cargo at the time of Shipment and (3) for tallying of Cargo other than at the time of landing and shipment. The Tally Sheet in the case of Import Cargo taken charge of by the Trust and of export Cargo taken charge of by the Trust for shipment are in the forms prescribed by the Government under Section 42(2) of the Major Port Trust Act, 1963."
20. As per then Manual of Instructions of Madras Port Trust 4.17 -
"Each Tally sheet which is prepared in triplicate shall be signed by the port Trust Tally Clerk and the Steamer Agent's representative and duplicate copy shall be handed over to the latter on the spot. This constitutes the receipt under Section 42 (2) of the Major Port Trust Act, 1963."
21. Manual of Madras Port Trust Instructions 4.18 deals with annotation of packages which reads as under:-
"4.18. The Trust is not liable for any package broken or otherwise damaged before landing. It is, therefore, vital to note down the actual condition of the package at the time of landing. To absolve the Trust from any liability for any broken or damaged packages, the Tally Clerks shall carefully note the actual conditions of the package and make an annotation in the following terms against the tally entry. Only the prescribed abbreviations as noted below shall be used uniformly:-
Band Cut.. Bc
22. Ex.D3 is the Import Tally Sheet issued under Sec.42 (2) for discharge of the Cargo from Vessel M.V. KARINA BONITA on 09.04.1989. In Ex.D3, the entries of the suit consignment intended for the 1st Plaintiff-National Engineering Industries Limited is stated as under:-
Description of packages
Marks and Numbers
Particualrs of Tally
Weight T.Cwt.Qr Lbs or Kilos
Ex.D3-Import Tally Sheet has been signed by the Agent of the Ship/Representative of the Steamer Agent of Vessel and Port Trust Representative. Onbehalf of 2nd Defendant-Madras Port Trust, the Assistant Traffic Manager Port Trust was examined as DW3. In his evidence, DW3 has stated that " .... suit consignment was in a damaged condition, that is, 'planks broken condition". DW3 has further stated that "annotation therein is stated in Ex.D3-Import Tally Sheet and Ex.D3 is the receipt given under Sec. 42 (2) of Major Port Trust Act. Ex.D3 is signed by Steamer Agent as well as Port Trust representative". DW3 has further stated that annotation in Ex.D3 was acknowledged by the Steamer Agent.
23. Plaintiffs and 1st Defendant dispute the Case weighing 4800 Kgs. being annotated as "PBKN". Contention of Plaintiffs is that the remarks column stated as " ~ " ...... means 'NIL' and that Case weighing 4800 Kgs. has not been annotated. Learned counsel for Plaintiffs mainly relies upon the answers elicited from DW3 during the cross-examination. During his cross-examination, DW3 has stated that " ... one Case was annotated as 'PBKN' and in respect of another Case there is no annotation." Laying emphasis upon the evidence of DW3 and the mark " ~ " made in Ex.D3-Tally Sheet, learned counsel for Plaintiffs contended that the statutory document [Ex.D3] would prevail upon any other documents and much weight has to be attached to the evidence of DW3 who has stated that "one Case was annotated as 'PBKN' and in respect of another Case there is no annotation". We are unable to accept the above contention. Answers elicited from DW3 during his cross-examination has to be read as a whole and not in isolation. In his chief-examination, DW3 has clearly stated that suit consignment was discharged in 'Planks Broken condition'. In his cross-examination, DW3 has further clarified that " ..... according to the tally sheet both the packages have been annotated as 'PBKN' ". Evidence of DW3 that only one Case was annotated as "PBKN" and in respect of another Case, there was no annotation demonstrably does not reflect the pleadings and other evidence.
24. Admitting the annotation of the consignment, in Paragraph-4 of the Plaint, Plaintiffs averred that "Second defendant annotated the receipt of the consignment at the time of discharge from the vessel and tries to avoid liability". In his evidence, DW1-Ranganathan, employee of Steamer Agent [ICSA] has also stated that " ... In these two Cases it is PBKN. It means Planks Broken ".
25. South India Shipping Services [SISS] is the Clearing Agent of the Plaintiffs. Ex.P6 is the letter addressed by SISS to Madras Port Trust. In Ex.P6, SISS has clearly stated that " ... the package was annotated as PBKN ...". Ex.P10 [10.06.1989] is the Certificate issued by Madras Port Trust to SISS indicating that Case No.1 weighing 4800 Kgs. has been annotated as "PBKN" which reads as under:-
Marks & Nos.
No. of Packages & Description
G.Wt. 4800 Kg
PBKN - 1
On request made by SISS, Lloyd's Agency has conducted survey of the damaged consignment. In Column-4 of Ex.P12-Survey Report, it is stated that -
"Applicant [SISS] state tallied as "PBKN" by the Port Trust"
In Ex.P31-letter [19.05.1989], SISS has requested the Madras Port Trust to conduct the survey. Rejecting the request for survey, on the back side of Ex.P31 it is stated as -
"The annotation for the c/s under reference (c/s No.1 wg. 4,800 Kgs gross) is "PBKN" as per tally sheet No.528 Sl.J No.2638. Since the case is Time Barred, The Trust cannot survey & Hence rejected."
However, subsequently without prejudice, survey was conducted by Madras Port Trust. In Ex.P12-Survey report, in the remarks column, it is stated as under:-
"The case was annotated as PBKn vide tally sheet No.528/J 2638 dt. 9.4.89 under Sec.42(2) of the Major Port Trust Act 1963. (38 of 1963) as amended by the Major Port Trust Amendments Act 1974 (29 of 1974)"
26. In response to the letter from SISS to conduct survey, the Steamer Agent-ICSA in Ex.P18 has indirectly accepted the annotation of PBKN but would state that "PBKN does not constitute evidence of discrepant discharge. Letter of ICSA [Ex.P18] reads as under:-
"We are replying to your letter of the 28th July enclosing the claim referred to together with invoice. The annotation PBKN does not constitute evidence of discrepant discharge. This is a type of heavy equipment and you cannot contend that the contents were also in discrepant condition at the time of discharge. If we were to survey all packages annotated as PBKN this is just impossible for both Customs and others concerned. In fact Appellant Authorities just ignore the remark PBKN as constituting damage for claim against carrier by Customs." [underling added]
27. Plaint averments and the above documents would clearly show that Case No.1 weighing 4800 Kgs. was annotated as "PBKN". Parties proceeded on a clear and specific premise that consignment was "PBKN" and that is why in the Plaint also, Plaintiffs averred that suit consignment was annotated and the Port Trust tries to avoid its liability. Learned counsel for Plaintiffs forcibly submitted that the Import Tally Sheet Ex.D3 being a statutory document much weight has to be attached to the remarks column in Ex.D3. Learned counsel for Plaintiffs would further contend that as per Sec.42(2) and Manual of Instructions 4.9 and 4.18 if there was any damage, Port ought to have properly noted the actual condition of the consignment and the extent of damage and having not done so, there is violation of statutory duty cast upon the Port Trust. The above submission is made across the Bar. Nowhere in the pleadings, such a plea was raised that there was violation of statutory duty as stipulated in Sec.42(2) of the Act and the Manual of Instructions. Ordinary rule of law is that no amount of evidence/arguments can be looked into upon a plea which was not put forth in the pleadings. In the absence of any specific pleading, Plaintiffs cannot contend that there was non-compliance of Manual of Instructions 4.9 and 4.18.
28. Ample oral and documentary evidence and evidence of DW3 would clearly establish that suit consignment weighing 4800 Kgs was annotated as "PBKN". Parties consciously went to trial knowing fully well that the Case weighing 4800 Kgs was annotated. In fact, in his evidence, DW1 has stated that annotation 'PBKN' is only a general remark. Ex.D4 corresponds to Ex.P12. Observing that the Case annotated as 'PBKN' vide Tally Sheet No.528/J-2638 dated 09.4.1989, the learned single Judge observed that it is factually incorrect as the Case annotated as PBKN is only the other Case weighing 2320 Kgs. On those findings, the learned single Judge held that the Case weighing 4800 kgs landed in good condition and that the damage of main machinery had been caused only after landing. As noted in Ex.P12-Survey Report, the consignment was covered with tarpaulin and in the packing there was no thermos or any other packing inside the Case. When there was no proper packing and when the case was discharged in 'Planks Broken condition" during transit, it cannot be contended that there could not have been any damage during transit. Contention of 1st Defendant that the consignment was discharged in good condition is not established.
29. The oral and documentary evidence would show that the consignment containing 4800 Kgs. was annotated in "Planks Broken condition". We do not endorse the finding of the learned single Judge that annotation was only for the Case weighing 2320 Kgs. We also do not endorse the finding that the entire damage was caused only after landing. As discussed earlier, annotation "PBKN" was not only for the Case weighing 2320 Kgs., but also for the suit consignment weighing 4800 Kgs. and Point No.1 is answered accordingly.
30. Points No. 2 to 5:- In his evidence, DW3-Assistant Traffic Manager in Madras Port Trust has stated that since there was heavy congestion of the Cargo already discharged and stocked on the wharf at that time the suit consignment had to be stacked in the open adjacent to the transit shed where they are normally stacked when there is congestion. On 12.04.1989 during the course of Railway Wagon movement, the side of one of the Wagon came into contact with the already protruding broken planks of the suit package, thereby brushing its side planks of the suit package. 2nd Defendant-Port Trust denies the damage being caused to the consignment due to the impact.
31. DW1-employee of Steamer Agent has stated that Port Trust has been statutorily interposed to take delivery of the consignments landed from the Vessel. DW1 has further stated that subsequent to the discharge of the Cargo, 2nd Defendant has not removed the Cases to ware house but was only shifted by the section staff of 2nd Defendant to the open road side very close to the railway track and Case No.1 was extensively damaged while Railway Wagons carrying Cement bags were being shunted by the employees of the 2nd Defendant. Case of Plaintiffs and 1st Defendant is that the damage was caused only due to the negligence of the employees of 2nd Defendant-Port Trust while the Cargo was in their custody.
32. Section 43(2) of Major Port Trusts Act, 1963 equates Port's responsibilities with that of a bailee under Sections 151, 152 and 161 of Indian Contract Act; a bailee has to take the same care as a man of ordinary prudence would under similar circumstances take of his own goods of similar nature; quality and value.
33. Explaining the steps taken by the 2nd Defendant-Port Trust, DW3 has stated that whenever there is congestion in the shed, they have to stock the Cargo in the open yard and heavy packages were lifted and stocked by Votals Box of a capacity of 10 tonnes and they will move very easily to any point and the consignment was so moved and stocked in the open yard. In his evidence DW3 has stated that the representative of Steamer Agent was also aware of the same. In the open yard, there is a small Railway siding. Both in the written statement and in his evidence of DW3 has admitted that on 12.4.1989 there was a Wagon movement and the Wagon came into contact with Case No.1 stacked in the open yard and caused damage; but DW3 would deny the extensive damage being caused due to impact. Defence plea that the impact has not caused extensive damage does not merit acceptance. Plaintiffs and its Clearing Agent-SISS have arranged for a private survey by Lloyds & Company. Ex.P11-Survey report of Lloyds and Company refers to the visible damages sustained by the Unit:-
(i) All the metal panels were badly crushed &/or split; (ii) A portion of the Relay Control panel was badly crushed and split; (iii) One Fanuc (Position mate) computer S.No.FV 8350/85 was badly crushed.
Apart from the visible damages, Control Panel also sustained extensive damages as indicated in Ex.P11-Survey Report. Without prejudice, 2nd Defendant-Madras Port Trust/Traffic Manager has also conducted survey [Ex.P12]. There is no denying that Cases were stacked in the open yard and on 12.04.1989 there was a Wagon movement which brushed away the already broken planks causing damage to the machinery.
34. As is seen from the Catalogue, Automatic Cycle Internal Grinder/the grinding machine is developed and completed for high accuracy and efficiency and the machinery is stated to be highly sophisticated one. In view of the damages caused, Engineers have opined that it was not practicable to repair the machinery economically to enable it to give guaranteed performance [Vide Ex.P33-Engineer's certificate]. Therefore, the machine was auctioned through M/s.Murray and Company for Rs.3,85,000/-.
35. Learned counsel for Plaintiffs contended that applying the Doctrine of res ipsa loquitur ? things speak for itself, 2nd Defendant-Port Trust is solely responsible for the damage caused due to the negligence. Section 42(2) of the Act clearly states that a Board will take charge of the goods and give a receipt in such form as the Board may specify. The Tally Sheet [Ex.D3] is a statutory document issued in respect of the suit consignment. Learned counsel for Plaintiffs would submit that Tally Sheet being a public document recognised by the Major Port Trusts Act and that it is the most crucial document to decide the responsibility. It was further submitted that as per Sec.79 of Indian Evidence Act, the presumption is infavour of the document. Contention of Plaintiffs is that the mark " ~ " shown in Ex.D3-Tally Sheet is only indicates " NIL" and DW3 in his evidence has also stated that "only one Case was annotated". Further contention is that since Ex.D3-Tally Sheet indicating the remarks "NIL" for the Case weighing 4800 kgs, the letter dated 24.4.1989 written by SISS cannot unsettle the evidence produced by way of Tally Sheet. Placing reliance upon AIR 1981 Mad 162 [Union of India v. The United India Fire and General Insurance Company Limited and another], the learned counsel for Plaintiffs contended that the burden of proof is on the Appellant to show that he had taken all possible diligence to protect the goods and only after he does so, Plaintiffs will be called upon to disprove the same. It was further contended that Appellant is duty bound to produce reliable and unassailable evidence that they have taken care of the goods bailed to them as a man of ordinary prudence would under similar circumstances take of his own goods.
36. As pointed our earlier, as per Sec.43 of Major Port Trusts Act, Port's responsibility is that of bailee under Sections 151, 152 and 161 of Indian Contract Act; a bailee has to take same care as of a man of ordinary prudence would under similar circumstance take care of his own goods.
37. Section 43 of Major Port Trusts Act reads as under:-
43. Responsibility of Board for loss, etc., of goods.- (1) Subject to the provisions of this Act, the responsibility of any Board for the loss, destruction or deterioration of goods of which it has taken charge shall,-
(i) in the case of goods received for carriage by railway, be governed by the provisions of the Indian Railways Act, 1890 (9 of 1890); and
(ii) in other cases, be that of a bailee under sections 151, 152 and 161 of the Indian Contract Act, 1872 (9 of 1872), omitting the words" in the absence of any special contract" in section 152 of that Act:
[Provided that no responsibility under this section shall attach to the Board -
(a) until a receipt mentioned in sub-section (2) of section 42 is given by the Board; and
(b) after the expiry of such period as may be prescribed by regulations from the date of taking charge of such goods by the Board.]
(2) A Board shall not be in any way responsible for the loss, destruction or deterioration of, or damage to, goods of which it has taken charge, unless notice of such loss or damage has been given within such period as may be prescribed by regulations made in this bahalf [from the date of taking charge of such goods by the Board] under sub-section (2) of section 42.
38. A bailee is responsible for proper care of goods entrusted to him. The burden of proof lies on him to show that such care as a man of ordinary prudence would have exercised, was duly exercised by him.
39. Where the bailor sues the bailee for damage to goods due to bailee's negligence, the bailor has to prove negligence or lack of sufficient care on the part of the bailee from the materials produced by the bailee to prove absence of negligence on his part. A bailor claiming damages for failure to take care on the part of a person to whom Section 151 of the Contract Act applies may succeed in discharging his onus in two ways: (a) he may show that the bailee has failed to place before the court all the materials available to him, as required of him under S.106 of the Evidence Act, and ask the court to presume that if produced such material would have gone against the bailee; (b) he may also show on such materials as have been produced by the bailee, that he has not taken as much care as is required of him under S.151 of the Contract Act. [Vide ? AIR 1917 PC 173 : 1918 MWN 435 (Dwarkanath Raimohan Choudhuri and another v. The River Steam Navigation Company Ltd.)].
40. When goods entrusted to a bailee are lost or damaged, there is an initial presumption, though rebuttable, of negligence of, or failure to take reasonable care of the goods, by the bailee. To escape the liability for the loss or damage, onus is on the bailee to prove that he had taken necessary precautions and care required of him under law. He may be absolved if he establishes that he had taken reasonable care to avoid the damage which was reasonably foreseeable or all reasonable precautions to obviate the risks which could be reasonably apprehended. [Vide ? AIR 1983 Kerala 154 (Cochin Port Trust vs. Associated Cotton Traders Limited and others)]. The loss or damage of goods entrusted to a bailee is a primafacie evidence of negligence and burden of disproving negligence lies on the bailee. Since there has been a damage of goods delivered to the custody of 2nd Defendant-Port Trust, it is for the 2nd Defendant-Port Trust to negative the negligence on its part.
41. Learned counsel for Plaintiffs contended that once the goods were entrusted to the custody of Port Trust, Port Trust is supposed to move it to the ware house and while so, it has stacked the Cases in the open yard very close to the railway track and the Railway Wagon hit the consignment. It was further submitted that even if there was any congestion in the ware house, the employees of Port Trust should have kept the consignment at safe distance from the railway track and the very fact of keeping the goods in the open yard is primafacie evidence of negligence on the part of 2nd Defendant-Port Trust. Contending that it is for the 2nd Defendant-Madras Port Trust to disprove the negligence on its part, learned counsel for Plaintiffs placed reliance upon AIR 1957 Cal. 190 [Indian Trade and General Insurance Co., Ltd. v. Union of India], where the Calcutta High Court held as under:-
"The burden of proof of the issue as to negligence ultimately rests with the plaintiff. The plaintiff has to satisfy the Court that the defendant was negligent but the duty of showing how the consignment was dealt with during transit lies on the railway administration as a matter within its special knowledge. As the law does not cast on the plaintiff the obligation of proving how the loss arose and as it imposes on the defendant the duty of showing how the goods were dealt with while under its control, the latter must first adduce evidence disclosing its treatment of the goods and the plaintiff may rely on that evidence, in addition to any tendered by him to show that the loss had occurred by reason of defendant's default or negligence or that the loss could not have occurred but for such default or negligence. If the defendant does not adduce all the evidence at its command the plaintiff may in proper cases ask the Court to make a presumption under section 114 (g) and come to the conclusion that the evidence which has been withheld would have gone against the defendant".
The above decision has been referred with approval by the Division Bench of this Court in 1981 (2) MLJ 128 [Union of India, owning Southern Railway, represented by its General Manager, Madras v. The United India Fire and General Insurance Company Limited and another].
42. Explaining the reasonable care taken by the Port Trust, DW3 has stated that since there was congestion in the shed, they have to stock the Cargo in the open yard and heavy packages were lifted and stocked by Votals Box which will move very easily at any point and the suit consignment was stacked in the open yard. In his evidence DW3 has stated that the representative of Steamer Agent was also aware of the stacking of consignment in the open yard. According to DW3, they have taken all reasonable care to safeguard the consignment and that the damage has not occurred at the hands of 2nd Defendant-Port Trust, but it has occurred before coming into the Port Trust custody.
43. Even though DW3 has explained the measures taken by the Port Trust in safeguarding the consignment, the concerned employee was not examined to substantiate the plea that the consignment was stacked at safe distance from railway track; nor any other employee was examined to prove that inspite of the measures taken by the Port Trust, Wagon movement has caused the impact. In the absence of examining any of the employees or adducing any other evidence, 2nd Defendant-Port Trust cannot be held to have discharged the onus of showing that it had exercised all reasonable care and caution in dealing with the suit consignment. Since the Cases containing machinery was stacked in the open yard near the Railway siding, Railway Wagon hit the consignment causing damage. In our considered view, 2nd Defendant-Port Trust is also responsible for the damages caused to the consignment. As discussed earlier, learned single Judge did not take note of the annotation of the Case as "PBKN". Learned single Judge held that damages was only due to the negligence of the 2nd Defendant-Port Trust. We do not subscribe to the findings of the learned single Judge that 2nd Defendant-Port Trust was solely responsible for the damages caused.
44. Our conclusions are two fold:- (i) Consignment discharged was annotated as "Planks Broken" ? PBKN; (ii) 2nd Defendant-Port Trust also did not take due care as was required of a baillee. In the light of our above conclusions, the next point falling for consideration is how the interse responsibility of Defendants 1 and 2 is to be fixed or apportioned.
45. Drawing our attention to the evidence of PW1, it was submitted that "PBKN" means Planks Broken and that it is only superficial in nature and that it means package of the Cargo is in a broken condition and that extensive damage to the machinery was caused only after landing.
46. As is seen from Ex.P33-Engineer's certificate the Automatic Cycle Internal Grinder is a high precision and fully automatic grinding machine to grind (with constant grinding force control device for controlled feeding of the grinding wheel) bore of bearing races within a close tolerance of to 4 microns with perfect concentricity with the outside diameter. As is seen from Ex.P39-Catalogue the grinding machine is developed and completed for high accuracy and efficiency after the results and experiences of a long time. Because of its high rigidity it is very durable. The work pieces with the finished outer diameter and the right angle and face supported by shoe and are rotated by magnet chuck for the inside diameter with the same concentricity of outer diameter by this centerless type. In Ex.P33, the Engineer has noted that the machine has employed latest technology involving numerous sequentially stepped cycles and systems. The operation sequence cycles are controlled by Programmed Logistic Control (PLC) system. Such a highly sophisticated machine with heavy weight of 4800 Kgs requires proper packing. By perusal of Ex.P12, it is seen that there was no thermos or any other packing inside the Case to hold the machine so as to avoid any damage. In Ex.P12-Survey report, it is noted that it was only packed with thin plywood of 1/3" thickness [gross weight 4800 kgs) with reaper. Because of thin packing the weight of the machinery could not withstand any shifting. There was no side support provided on all side of the machine. Prudence requires such packages being indicated as "FRAGILE" or "HANDLE WITH CARE". In Ex.P12, it was noted that -
(i) there was no stencil indication as "FRAGILE" or "HANDLE WITH CARE" on the planks of the Case; (ii) There was no specific precaution letter from Steamer Agent or the Importer to handle the package carefully as is being done by the Steamer Agents regarding valuable Cargo; (iii) Case was in damaged condition.
From remarks column in Ex.P12, we find that "there was no proper packing" of the consignment apart from lack of any precautionary indications. In his evidence, DW3 has stated that consignment was already discharged in damaged condition. Though DW3 was not in a position to state about the extent of damages, the fact remains that the consignment was discharged with "Planks Broken condition ? PBKN". When the consignment was discharged in Planks Broken condition, the possibility of internal damage caused during transit cannot be ruled out. The damage was further aggravated due to hit by the Railway Wagon. As pointed out earlier, Ex.P12-Survey report and Ex.P33-Engineer's certificate elaborates upon the damages caused to the consignment. Though PWs.1 and 2 have stated that the consignment was discharged in good condition, there is ample evidence to show that Cases were discharged with Planks Broken condition ? "PBKN".
47. Having regard to the inadequate and unsafe packing and that the Case was discharged in 'PBKN', in our considered view there is every possibility of damage being caused to the machinery. As stipulated in Madras Port Trust Manual of Instructions 4.18 while annotating the packages, it would be appropriate for the Port Trust/Tally Clerk to note the actual condition of the package and also the nature of the damage. However, in this case, no evidence is adduced to show the extent of damage of the consignment at the time of discharge. As discussed earlier, by hit of the Railway wagon, Port Trust's negligence also caused damage to the consignment. In the facts and circumstances of the case, we are of the view that the responsibility and liability of Defendants 1 and 2 is to be fixed at 50% : 50%. To that extent the finding of the learned single Judge that damage was only due to the negligence of 2nd Defendant-Madras Port Trust stands modified.
48. Learned counsel for Appellant contended that placing the suit consignment in the open yard was done in good faith and therefore the act of Port Trust is protected under Sec.121 of Major Port Trusts Act and Port Trust cannot be held liable. Section 121 of Major Port Trusts Act reads as follows:-
"121. Protection of acts done in good faith. - No suit or other legal proceeding shall lie [against the Authority, a Board or any member] or employee thereof in respect of anything which is in good faith done or intended to be done under this Act or any rule or regulation made thereunder, or for any damage sustained by any vessel in consequence of any defect in any of the moorings, hawsers or other things belonging to or under the control of the Board."
Protection is available in respect of the acts done in "good faith". Sec.3(22) of General Clauses Act, 1897 defines "good faith" as follows:-
"A thing shall be deemed to be done in "good faith" when it is in fact done honestly, whether it is done negligently or not."
49. According to the learned counsel, 2nd Defendant was not wanting in "good faith" and in the absence of culpable negligence, Port Trust cannot be held liable. As discussed earlier, the consignment was kept in the open yard near the Railway track. No employee was examined to bring home that the consignment was handled with care and placed at a safe distance. In the absence of any evidence, it cannot be held that the act was done in "good faith" to invoke protection under Sec.121 of Major Port Trusts Act.
50. Learned counsel for Appellant nextly contended that the suit claim is barred by limitation under Sec.120 of Major Port Trusts Act. Under Sec.120 of Major Port Trusts Act, no suit or other proceeding shall be commenced against a Board or any member or employee thereof for anything done or purporting to have been done in pursuance of the Major Port Trusts Act until the expiration of one month after notice in writing has been given to the Board or him stating the cause of action or after six months after the accrual of the cause of action. In the Plaint, in paragraph (7), it is averred that the suit amount has become payable on 05.4.1989 - the date of arrival at Madras of the Vessel; On 12.4.1989 - the date of alleged damages to the consignment by the 2nd Defendant-Port Trust and on 04.10.1989, by letter of which, Plaintiffs counsel demanded the suit amount from the Chairman of the Madras Port Trust. The suit was presented on 03.11.1989. Learned counsel for Plaintiffs submitted that the suit has been filed within one month after notice in writing and therefore, the suit is well within time. As rightly contended by the learned counsel for Appellant, the date of issuance of notice i.e. 04.10.1989 cannot be the date on which cause of action has arisen. However, it is to be pointed out that at the request of SISS, Port Trust has conducted survey only in the month of June 1989 and only on conducting of survey, Plaintiffs came to know the extent of damage and thereafter, notice was sent on 04.10.1989 and suit was filed on 03.11.1989. In the said facts and circumstances, we concur with the view taken by the learned single Judge and the suit does not suffer from any bar of limitation.
51. So far as value of machinery, the claim made in the plaint is for Rs.28,10,325/-, the survey fee, the settling fees, telex charges, postage and other expenses incurred have been added, in all totalling Rs.28,21,979/-. In Ex.P15-Claim Bill dated 10.07.1989 the value of damaged goods is stated as J 25,220,000. Like wise, in Ex.P38-Statement of Claim, the value of damaged machine is stated as J 25,220,000. After referring to the oral and documentary evidence, learned single Judge observed that the value of Rs.28,21,979/- claimed by the Plaintiffs has been properly worked out. In this appeal, there was no serious objection as to the value of the machinery stated by the Appellant.
52. Sofar as interest - Plaintiffs have claimed 18% interest per annum on Rs.28,21,979/-. Observing that the transaction is not commercial transaction and pointing out that Plaintiffs have lost the benefit of amount, learned single Judge awarded interest at the rate of 6% p.a. payable on Rs.28,21,979/- from the date of suit till the date of realisation. Award of interest from the date of suit till the date of decree is discretionary. Section 34 CPC deals with discretion of the Court as to what interest is to be awarded by way of pendente lite interest. So far future interest or further interest is concerned, that too is also left entirely to the discretion of the Court subject to a limit of 6% p.a. However, added proviso would remove the limit to the future interest in commercial transaction. Since the suit claim is not arising out of commercial transaction but based on the liability of the ship carrier and also Port Trust, we concur with the rate of interest at 6% on Rs.28,21,979/- awarded by the learned single Judge.
53. Decree and Judgment was passed on 02.11.1998. Registry has drafted the decree calculating the amount at Rs.43,45,190.48 payable on the date of decree and thereafter at 6% p.a. on Rs.28,21,979 till the date of realisation.
54. Extent of 1st Defendant's liability ? Case of 1st Defendant is that Vessel's principal place of business in Japan and therefore, only Japanese Carriage of Goods by Sea Act would govern the contract of carriage. Case of 1st Defendant is that under the provisions of Japanese Carriage of Goods by Sea Act, the maximum liability of 1st Defendant cannot exceed Japanese Yen 100,000 [then exchange rate 843 = Rs.100]. Learned counsel for 1st Defendant contended that the Cargo having been consigned from Japan, only Japanese Carriage of Goods by Sea Act would be applicable. In this regard, learned counsel for 1st Defendant places reliance upon the terms and conditions in Ex.P3-Bill of Lading. As per Ex.P3-Bill of Lading, the contract is governed by Japanese Carriage
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of Goods by Sea Act and the limits of 1st Defendant's liability is stipulated in Clauses 1 and 23 which reads as follows:- Clause  (Clause Paramount) This bill of lading shall have effect subject to the provisions of the International Carriage of Goods by Sea Act of Japan, 1957 (Hague Rules Legislation) unless it shall be adjudged that the like statute of another country is applicable when this bill of lading shall have effect subject to the provisions of such statute and the said Act or statute shall be deemed to be incorporated herein, and nothing herein contained shall be deemed a surrender by the carrier of any of its rights or immunities or an increase of any of its responsibilities or liabilities under the said Act or statute, if any, terms of this bill of lading be repugnant to the said Act or Statute to any extent, such term shall be null and void to that extent and no further. Clause  The carriers liability for any loss of damage to or in connection with the goods shall be calculated on, and shall in no case exceed, the shipper's net invoice cost plus freight and insurance, if paid, less all charges saved, or 100,000 lawful currency of Japan per package or per customary freight unit, whichever shall be least, unless the nature of the goods and valuation higher than 100,000 shall have been declared in writing by the shipper before shipment and inserted in this bill of lading and extra freight paid as required. If the actual value of the goods or per customary freight unit exceeds such declared value, the value shall nevertheless be deemed to be declared value. The carriers liability shall not exceed such agreed or declared value, as the case may be and any partial loss of damage shall be adjusted pro rata on the basis of such agreed or declared value. The carrier shall not be responsible in any event, for the loss of or damage to or in connection with goods if the nature or value thereof has been knowingly misstated by the shipper in this bill of lading. The entire contents of each container or pallet shall be deemed as one package for the purpose of application of this bill of lading. It is agreed and understood that the meaning of the word "Package" includes animals and all pieces articles or things of any description whatsoever except goods shipped in berth." Vessel sailed from Japan and therefore the terms and conditions of the contract stipulated in the Bill of Lading [Ex.P3] would be applicable. 55. In an identical case in AIR 2008 SC 728 [Shipping Corporation of India Ltd. v. M/s. Bharat Earth Movers Ltd. and another], the Supreme Court held as ? " A bare perusal of S.2 of Carriage of Goods by Sea Act, 1925 would clearly demonstrate that the same applies to the carriage of goods by sea in ships carrying goods from any port in India to any other port whether in or outside India which would mean that the Indian Act shall apply only when the carriage of goods by sea in ships takes place from a port situate within India and not a port outside India. The Japanese Act, on the other hand, applies in a situation where carriage of goods by a ship is either from a loading Port or from a discharging Port, either of which is located outside Japan. Therefore, Japanese Act will clearly be applicable in the instant case, where goods were carried in vessel from Port, in Japan to its destination in India." 56. Even though, we have apportioned 50% liability to the 1st Defendant's Vessel, Japanese Act provides for limited liability i.e. Japanese 100,000. To hold the vessel for unlimited liability, as per the terms of contract [ Ex.P3], the value of the goods must have been stated in the Bill of Lading so as to enable the shipping concerned to calculate the quantum of freight. There is nothing to indicate that the value of the goods has been stated/declared in Ex.P3-Bill of Lading so as so enable the shipping concerned to calculate the quantum of freight. Ofcourse, the value of machinery is stated in the Invoice [Ex.P1] at 25, 220,000. As held by the Supreme Court in AIR 2008 SC 728 [Shipping Corporation of India Ltd. v. M/s.Bharat Earth Movers Ltd. and another], Invoice is not part of Bill of Lading. In the absence of any evidence to show that value of the goods has been declared in the Bill of Lading [Ex.P3], the liability of the 1st Defendant could only be limited to the extent of Japanese Yen 100,000. 57. We are unable to concur with the finding of the learned single Judge holding that the goods landed in good condition and that damage was caused only after the goods were landed. It is held that the suit consignment was discharged in "Planks Broken condition ? PBKN". We also set aside the findings of the learned single Judge that the damage was only due to the negligence of the 2nd Defendant-Port Trust. For the foregoing reasons, it is held that Appellant-2nd Defendant and 1st Defendant are held liable in the ratio 50% : 50%. Insofar as liability of 1st Defendant's ship, the same is for limited liability to the extent of Japanese Yen 100,000 i.e. Indian value Rs.11,862/- and the Judgment of the learned single Judge is to be modified to that extent and Issues No.2 to 5 are answered accordingly. 58. In the result, the Decree and Judgment in C.S.No.11 of 1990 dated 02.11.1998 is modified and this Appeal is partly allowed. It is held that Appellant-Madras Port Trust [2nd Defendant] is liable to pay 50% of the suit claim of Rs.28,21,979 i.e. Rs.14,10,990/- payable with interest at the rate of 6% p.a. from the date of plaint till the date of realisation. 1st Defendant Ship is liable to pay Japanese Yen 100,000 i.e. Indian value Rs.11,862/- payable with interest at the rate of 6% p.a. from the date of plaint till the date of realisation. Both Appellant-2nd Defendant and 3rd Respondent-1st Defendant shall pay proportionate suit cost to the Plaintiffs. Both parties shall bear their respective costs in this Appeal.