R.Chaganlal Prop: Sha Maggaji Manoharmal v. 1. Ceylon Shipping Corporation

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 10.08.2007CORAM :THE HONOURABLE MRS.JUSTICE PRABHA SRIDEVANA.S.No.477 of 19951. R.Chaganlal Prop: Sha Maggaji Manoharmal Rep. by his Power Agent: National Insurance Co. Ltd.2. National Insurance Co. Ltd. Rep. by its Divisional Manager and Principal Officer, Madras... Appellants/Plaintiffs.-vs-1. Ceylon Shipping Corporation Rep. by their Agents at Madras: Sea Shore Shipping & Ship Management (P) Ltd.2. The Board of Trustees of the Madras Port Trust, rep. by Chairman, Madras-1... Respondents/Defendants.Appeal Suit against the judgment and decree of the learned V Asst.Judge, City Civil Court, Madras, dated 20.4.1993 made in O.S.No.6307 of1989.For Appellants:Mr.S.ArunkumarFor Respondents:Mr.K.Bijai Sundar for R-1:Mr.R.Karthikeyan for R-2J U D G M E N TThe plaintiffs are the appellants. The suit was filed for recovery ofa sum of Rs.37,670/- towards damages and short delivery of the goodscovered by the Bill of Lading No.3 dated 16.10.1988. The suit wasdismissed and therefore, this appeal has been filed. https://hcservices.ecourts.gov.in/hcservices/

2. The averments of the plaint in brief are as follows:-119 cartons of 'Stamping Foils' were packed in two pallets andentrusted with the first defendant under a Bill of Lading for carriagefrom Bremen to the second defendant Port Trust to be delivered to thefirst plaintiff. The Vessel arrived at Madras on 4.1.1989. The goodswere discharged on 9.1.1989 in a damaged condition and the firstplaintiff, by his letter dated 12.1.1989 wanted the first defendant todepute a surveyor to survey the damaged cargo and submit the report. Butthe first defendant did not arrange for such survey. Since there was noco-operation in this regard, the first plaintiff arranged for his ownsurveyor, who filed his report on 27.1.1989. By the report, the surveyorassessed the total loss at Rs.37,120/-. Claims were preferred by theplaintiffs on 9.2.1989 and on 15.2.1989. The claims were not settled andtherefore, the suit was filed after issuing the statutory notice underSection 120 of the Major Port Trusts Act, 1963. 3. The first defendant, through its agent, filed a written statementstating that the suit is barred for non-joinder of owners of the Vessel.According to them, the seals of the container discharged in the custody ofthe second defendant were intact at the time of its discharge; that thisdefendant arranged for the continuous discharge survey by a reputed firmof independant surveyors and therefore, the report would indicate that theseals of the containers were intact. The tally sheet prepared by thesecond defendant at the time of de-stuffing the cargo from the containerwould also show that the annotation of the pallets was only superficial innature. It is in these circumstances that when the first plaintiff made arequest for survey, this defendant refused to conduct the survey. Withoutprejudice to its rights, this defendant also stated that the loss, if any,would have occurred only when the goods were in the custody of the seconddefendant and therefore, the suit should be dismissed as against the firstdefendant.4. The second defendant, which is the Port Trust, filed its writtenstatement denying all the allegations and submitted that since the palletshad been received in a damaged condition, the report of the insurancesurveyor appointed by the plaintiffs would not bind this defendant andtherefore, their letter dated 15.2.1989 was rightly repudiated by thisdefendant. The suit consignment was received in a 'Cover Torn' condition.Therefore, there is no negligence, carelessness or want of due diligenceon the part of this defendant or its employees. Therefore, the suit isliable to be dismissed.5. Before the trial Court, the plaintiffs examined P.W.1 and thesurveyor as P.W.2 and marked twelve documents. An employee of the seconddefendant was examined as D.W.1 and three documents were marked. https://hcservices.ecourts.gov.in/hcservices/

6. The learned counsel for the appellants submitted that there is nodispute regarding the export, the date of landing and the date ofdischarge. Even when the goods were unloaded, there was a noting by thetally clerk that the cover was in a torn condition, as would be seen fromthe noting 'CT'. Though it is true that the plaintiffs took delivery ofthe pallets in the cover torn condition, it will be seen from Ex.A-3 thatimmediately the first plaintiff had made a request for survey of thedamaged cargo on 12.1.1989. The defendants indicated their unwillingnessto conduct the survey. On 24.1.1989, the plaintiffs cleared the goodsfrom Madras harbour after the survey by the insurance agent and theyinformed the first defendant that they would send their claim based on theinsurance agent's survey report. On 9.2.1989, they again sent acommunication to the first defendant, Ex.A-7, enclosing a copy of thesurvey report. On 15.2.1989, they have also served a notice of claim onthe second defendant by Ex.A-8. The notice under Section 120 of the MajorPort Trusts Act is Ex.A-9 and the acknowledgment card is Ex.A-10. Thereply by the counsel for the second defendant is Ex.A-11. Learnedcounsel, therefore, would submit that the sequence of events would showthat though the plaintiffs took delivery, they had lodged their complaintregarding the pilferage immediately and the fact that they did not objectthe tally sheet is not relevant since they immediately brought to thenotice the fact that there was pilferage. They took delivery only toavoid further pilferage after the survey was conducted. The surveyor'sreport, which is Ex.A-5, would clearly show that there was pilferage whilethe goods were in the custody of the second defendant. The learnedcounsel, therefore, submitted that for the damage that was caused intransit, the first defendant is liable and for the pilferage, the seconddefendant is liable and the Court below erred in dismissing the suit. Thelearned counsel relied upon certain judgments to support his case.7. The learned counsel for the first defendant would submit that theseal was intact when the goods landed at the Madras Port and Sections 42(2) and 42(7) of the Major Port Trusts Act clearly indicate that theliability of the carrier ends when a receipt is given by the Port Trustfor having taken charge of the goods and to support his case, he relied onthe judgment of the Andhra Pradesh High Court in SHIPPING CORPN. OF INDIAv. UNION OF INDIA [A.I.R. 1976 ANDHRA PRADESH 261]. 8. The learned counsel for the second defendant would submit that thesurveyor's report would not bind the Port Trust, that the opinion of thesurveyor is only based on surmises and there is nothing to indicate wherethe cargo pilferage took place. The goods had been shifted to the firstplaintiff's godown and if any pilferage that had taken place, the seconddefendant is not liable. The goods had come in a damaged condition andtherefore, the liability, if any, is on the first defendant and not thesecond defendant.9. The question is whether the plaintiffs are entitled to any amountfor the loss sustained by them. The crucial document is Ex.A-5. Ex.A-5 is https://hcservices.ecourts.gov.in/hcservices/ the surveyor's report and it shows that the place of survey was atBharathi Dock and at consignee's warehouse. The dates of survey are on13.1.1989 at the Port and on 24.1.1989 at the consignee's warehouse. Asregards the nature of packing and external condition of package conditionand nature of loss, it states that 5 cartons on one pallet and 2 on theother were found torn open and since 7 cartons were damaged at the Portand since opening of the rolls was not feasible at the Port, theconsignees were advised to inform the surveyor on arrival at the warehouseand at the warehouse, the pilferage was actually ascertained and theattributed cause of damage is that "the shortage can only be attributed topilferage at Madras Port". P.W.2 is the author of Ex.A-5. He has statedin cross-examination that the pilferage had taken place while the goodswere with the second defendant. The correctness of this opinion has notbeen challenged in the cross-examination. In fact, even in the cross-examination of the second defendant, it has been elicited that it is onlywhen the goods were in the second defendant's custody, some one haspilfered the goods. Therefore, this is the evidence which the plaintiffsrely upon for establishing their claim. 10. In BOND FOOD PRODUCTS PVT. LTD. v. PLANTERS AIRWAYS LTD. [(2006)ACJ 24], a Division Bench of this Court has considered the evidenciaryvalue of the surveyor's report and in paragraph 14.4, they have referredto the fact that no notice was given to the defendant before appointingthe surveyor nor before submitting the report. But, however, the DivisionBench relying on the decision of the Madhya Pradesh High Court in GWALIORTRANSPORT CO. LTD. v. NATIONAL INSURANCE CO. LTD. [1991 ACJ 811 (MP)],extracted the following paragraph -" The surveyor is an expert in the field of survey and unlessthere be something positive to discredit him, his assessment hasto be accepted. It would have been better if he had assessed thequantum of damages in the presence of the appellant or would haveat least noticed the appellant. However, the plaintiff would notbe non-suited and the survey conducted by C.P.Sarwahi would notbe discarded solely for this reason. A civil case has to bedecided on preponderance of probabilities. The goods weredelivered from the custody of the carrier to the consignor whowas also the consignee and there was nothing which prevented thecarrier from employing a surveyor for assessment of damagesspecially when an open delivery was being insisted upon. Thecarrier could also have insisted on a survey being conducted inhis presence which was not done. In the matter of assessment ofpartial loss to the goods, some guesswork has to be allowed. Theprice of the contents of bales is based on the invoices.Discount has been given for the value of the salvage. Primarily,the payment was to be made by the insurance company because theconsignor was claiming from it. There is no reason to assumethat any extra or unreasonable assessment would have beenacceptable to the insurance company." https://hcservices.ecourts.gov.in/hcservices/ and then held that when the defendant carrier failed to employ a surveyorand failed to prove that they have not committed any negligence, theevidence of the surveyor and the report of the surveyor must be accepted.11. Though it was contended on behalf of the respondents that thedecision in BOND FOOD PRODUCTS PVT. LTD. [(2006) ACJ 24], cited supra,arose out of a case where the goods were carried by road and that theliability in that case was under the Carriers Act and that the liabilityhere is under the Carriage by Sea Act, I do not think, on that score, thefindings of the Division Bench with regard to the evidenciary value of thesurveyor's report is in any way distinguishable. It applies on all foursto the present case.12. We have already seen that the tally sheet shows that the cover wastorn. In this regard, an unreported judgment of a learned single Judge ofthis Court in Appeal No.518 of 1978 dated 17.11.1982 (between Trustees ofthe Port of Madras v. Union of India and another) has been placed beforeme. There, a decree for damages was passed against the second defendantalone, the second defendant being the Port Trust. The Port Trustchallenged it in appeal. In that case, the annotation on the cargo was'cover torn with band cut' and it was contended on behalf of the PortTrust that no liability can be fastened on the Port Trust for anypilferage. The learned Judge referred to the following manualinstructions to the Traffic Department issued by the Madras Port Trust -" Annotation of Packages: - The Port Trust is not liable for anypackage broken or otherwise damaged before landing. It istherefore vital to note down the condition of the package at thetime of landing. To absolve the Trust from any liability for anybroken or damaged packages, the Tally Clerks shall carefullynote the condition of the package and make an annotation in thefollowing terms against the tally entry."and held that in view of the instructions issued by the Madras Port Trust,to absolve the second defendant from any liability for any broken packagesor any loss of goods, it is necessary that the tallying clerk shouldcarefully note the condition of the package and since the annotation wasnot "empty", the second defendant cannot escape liability. In that casealso, the off-loading of the carton took place two days after landing andat that point, the contents in the cargo were found missing and thelearned Judge held that the decree against the Port Trust, seconddefendant deserves to be confirmed. 13. The Assistant Traffic Manager of the Port Trust has been examinedas D.W.1. In his cross examination, he has stated that in Ex.B-1, thenoting is 'CT', which means 'Cover Torn'. But, there is no noting that atthe time of landing, there was short delivery. A suggestion has been putto him that the container tally has not been filed into Court only becausethe seal was intact when the goods had landed. He has referred to thecontainer tally and he has also stated that the container tally was not https://hcservices.ecourts.gov.in/hcservices/ broken when the goods landed. If the seal was intact and if the containertally is not produced in Court, we may make the adverse inference that itwas not produced in Court only because if the container tally is filedinto Court, it would show that at the time of landing, the seal wasintact, which would absolve the first defendant of any liability. Thenthe evidence of D.W.1 would only support the plaintiffs' case. We havealready seen that the surveyor's report clearly shows that the pilferage,if any, had taken place only when the goods were in the custody of theMadras Port. When the goods landed there was only a superficial tear inthe packages and the seal had been in tact and therefore, if there was anyshortfall in the goods, it did not take place while the goods were intransit. The plaintiffs had taken all efforts to have the survey doneimmediately after they observed that there was pilferage and the surveyorhas given his report that the pilferage took place in the Madras PortTrust. In these circumstances, the appeal deserves to be allowed. 14. Accordingly, the judgment and decree of the trial Court are setaside in so far as the second defendant is concerned and the appeal ispartly allowed. There shall be a decree as prayed for by the plaintiffsagainst the second defendant only.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.sraToThe V Asst. Judge, City Civil Court, Madras.The Registrar, Civil Civil Court, Madras.The Section Officer, VR Section, High Court, Madras.+ 1 CC To Mr. N.Rosi Naidu, Advocate SR NO.50855+ 1 CC To Mr. Bijai Sundar, Advocate SR NO.50125+ 1 CC To Mr. Ra.Rajan, Advocate SR NO.50127A.S.No.477 of 1995mj[co]gp/27/8/