P L D 1967 Supreme Court 68 (PLP)

S. A.. RAHMAN, J.‑This is an appeal, by special leave, .which arises out of a suit brought by the first respondents, the firm of Abdul Razak Abdul Kadar, for recovery of compensation for short‑delivery, loss and damage to goods, transported in a consignment despatched from Hong Kong to Chittagong. The appellants herein were the principal defendants in the suit, they being the carriers. The Federation of Pakistan, representing the Chittagong Jetty authorities, was impleaded as the second defendant and the Standard Marine Insurance Co. Ltd., through the Company's local agents, Messrs James Finlay & Co. Ltd., as the third defendant, being the insurers of the goods while in transit. The claim was decreed in full against the appellant Company, represented by its local agents, Messrs Mackinnon Mackenzie & Co., Ltd., Chittagong. The decision was affirmed, on appeal, by a Division Bench of the High Court of East Pakis tan at Dacca. Special leave. to appeal was granted in this case to consider the contentions raised on behalf of the appellants that the suit was barred by time. The finding of the High Court that, in any event, there was an extension of time by mutual consent, was also assailed as erroneous. It was contended that the documentary evidence had been misinterpreted by the High Court in this context. It was further maintained such an extension of time, being based on the provisions of section 63 of the Contract Act, was, to be excluded, if the contract was governed by the English Law contained in the Carriage of Goods by Sea Act, 1924, in accordance with a clause in the Bill of Lading. These points were regarded as substantial questions of law, of considerable general importance, justifying grant of leave. The relevant facts may first be briefly stated. The consign ment in question consisted of 50 bales of cotton yarn, each containing 40 bundles weighing 10 lbs., each. The goods had been indented for, by the first respondent, through the Habib Bank Ltd., Chittagong. They had been shipped from Hong Kong, under the Bill of Lading No. 33 (Exh. E2 (1)), as per appellant Company's vessel "s. s. PACHUMDA", for delivery unto the order of Habib Bank or its assignees at Chittagong. At Singapore, en route, the consignment was transhipped to another vessel of the Company, viz., "s. s. OLINDA". This ship berthed at Chittagong Port on the 17th June 1951 and dis charged her cargo, including the disputed consignment, between the 17th June 1951 and the 25th June, 1951. The ship left the Port on the last mentioned date. The plaintiff firm's case was that no notice had been given to them of the arrival of the vessel and that they came to know of that fact, for the ‑first time, on the 22nd September 1951, on receipt of a copy of a letter (Exh. 7), addressed by the carrier Company's agents to the Collector of Customs, for amendment of the import manifest. When a representative of the plaintiff firm went to take delivery, he discovered that the goods were damaged and a joint survey was, therefore, asked for and agreed to. The result of this survey was that one whole bale, and 90 bundles out of the remaining 49 bales, were found missing. In addition, 925 bundles, out, of the bales at the Jetty, had suffered damage by rain. Delivery was then taken between the 15th October 1951 and the 24th November 1951. A short‑delivery certificate was granted for one missing bale, after a protracted correspondence, on the 12th February 1952. Negotiations went on between the parties for an amicable settlement but they proved unsuccessful, and the suit was instituted on the 12th August, 1952, after service of notice under section 80 of the Code of Civil Procedure on the second respondent, viz. the Federation of Pakistan. In all, a sum of Rs. 19,000 was claimed, which included Rs. 1729‑3‑0 for the missing bale, Rs. 3909‑6‑0 for the 90 missing bundles and Rs. 1,004‑15‑0 for the damaged bundles, besides sales‑tax and estimated profits on the goods in question: The defence of the Federation of Pakistan was that the short‑delivery as well as the damage to the bundles in question, was to be attributed to the actions of the carriers and they were responsible for them. On the contrary, the position of the appellant‑Company was that they had delivered the consignment in its entirety to the custody and possession of the Jetty authorities and therefore, no liability attached to them. The insurance Company contested the suit mainly on the plea that loss and damage, if any, did not take place during the risk period, that is, on board the vessel. The pleas of the parties were reflected in some 14 issues framed by the trial Judge. The material findings recorded by the trial Court and with which we are now concerned, were that the short‑delivery and the loss and damage took place during the period the carrier‑Company was in charge of the consignment. It was also held that the suit was not barred by limitation: The finding of the trial Court, that the loss or damage occurred while the appellant‑Company was in charge of the consignment, was affirmed in appeal by the High Court. The High Court also agreed with the trial Judge in holding that, in fact, one bale had been short‑landed and that out of the 49 bales, 90 bundles were missing and 925 bundles damaged, as found by the joint survey of the parties. The short landing certificate had been duly signed by the appellants though their representative later refused to sign an amended certificate which merely corrected the description of labels on the goods, in this document. These being questions of fact, and there being concurrent decisions of the Courts below on the points, we see no sufficient reason to disturb these findings which are based on a full appreciation of the relevant evidence. The first point urged, in support of the appeal, by Mr. S. M. Hussain is that the High Court were in error, in holding that there had been an extension of time by, mutual consent, for the whole claim. He points out that assurances, if any, emanating from the appellant‑firm, concerning extension of time, related to the missing goods and not to the damaged part of the consignment. In this connection, he has invited our attention to the documents, Exhs. 6(c), 6(n) and 6(p), which are letters sent by the appellant‑firm to the plaintiff‑respondent. The first letter is dated the 15th of January 1962, and refers to the claims of the plaintiff, for the value of 90 bundles, alleged to have been received short, and 925 bundles received in damaged condition, due to contract with rain water. The plaintiff‑firm were intimated by this letter that the appellants were investigating the matter and would "revert in due course". They asked for the steamer survey report to be sent to them, to enable them to pursue the matter further. The second letter, dated the 7th May 1952, informed the plaintiff-firm that, in terms of the Company's Bill of Lading, the appellants were unable to admit liability, on behalf of the carriers, for the rain damage sustained by the consignment. It was suggested that the claim, with regard to it, may be referred to the Underwriters, for settlement. In respect of the shortage of 90 bundles, it was stated therein that the matter was under correspondence between them and the Surveyors. The plaintiffs were told to rest assured that provided the loss was not more than 100 from a single bale, their claim would be met in full and would not be time barred. The third and the last letter bears the date, the 6th of July 1952 and starts by acknowledging receipt of the plaintiff's letter, regarding the claim for the value of one bale and 90 bundles alleged to have been received short and/or in damaged condition. In reply, it was said that, from their records, they could not find that they had signed any short‑landing certificate for one bale, out of the consignment in question. They, therefore, proposed to investigate the matter, provided the plaintiffs could produce their copy of the short‑landing certificate for verification. It was further confirmed that, if the short landing certificate had been signed by them, the question of time limit would not prejudice the plaintiffs' claim. As regards the claim for the shortage of 90 bundles, it was recited in this letter that the appellants had referred the matter to their Managing Agents, on receiving their reply, they would "revert in due course". This position seems to have been recognised in the plaintiffs' own letter, addressed to Messrs James Finlay & Company, dated the 11th May 1952 (Exh. 6 (v)). It appears to be correct, there fore, that the extention of time, agreed to by the appellants, had reference merely to the short‑delivery of one whole bale and 90 missing bundles and not to the damaged part of the consignment. This, according to the appellants, was admittedly the factual position, but it is contended that the suit was barred by limitation as a whole, and even in respect of the two items of short‑delivery, the agreement to extend time was unavailing, as, under English Law which governed the contract, such an agreement would be ineffective, for lack of consideration. In connection with the first point, it seems to have been assumed in the High Court that the English Carriage of Goods by Sea Act, 1924, was applicable to the case, by virtue of clause 16 incorporated in the Bill of Lading, reading as follows:‑‑ "16. LAW APPLICABLE. The contract evidenced by this Bill of Lading shall be governed by the Laws of England and in accepting, this Bill of lading, the shippers and consignees expressly accept and agree to all the stipulations, exception and stamped or printed, as fully in terms, by virtue of section 1 of goods by Sea, in ships carrying goods from any port in Great Britain or Northern Ireland, to any other port, whether in or outside these two territories. It does not obviously cover the goods shipped from Hong Kong. Learned counsel for the appellants has suggested that Hong Kong, which is a Britian Colony, had adopted similar legislation, namely, the Carriage of Goods by Sea Ordinance, 1928, as stated in Carver's Treaties, "Carriage of Goods by Sea" Tenth Edn. at p 1057. At p. 1056 of the book, it is mentioned that is all the territories specified on the next page, legislation similar to the English Act, 1924, had been passed and had taken effect. The Hong Kong Ordinance has not been made available to us. Learned counsel contends that it ought to be presumed that it contains a provision similar to the English Act and particularly that it incorporates clause (6) of Article 3 of the Schedule to that Act, which, inter aria provides that, "in any event, the carrier and the ship shall be discharged from all liability, in respect of loss or damage, unless suit is brought within one year after the delivery of the goods, or the date when the goods should have been delivered". Here, it is said that the suit was brought clearly beyond the period of one year from the last date of delivery, namely, the 24th June, 1951, and consequently,, the liability of the carrier, if any, had been extinguished, before. the date of its institution. In these circumstances, it is maintained, there was no question of extension of time as the matter concerned a substantive right and not merely the procedural law of limit ation. The trial Judge had found that the plaintiff‑firm was entitled to exclude the period of two months, prescribed for a notice under section 80 of the Code of Civil Procedure, to be served upon the Federation of Pakistan, before it could be sued. The High Court differed from this view, but nevertheless held that there was extension of time granted by mutual consent of the parties and that there action saved the suit from the bar of limitation. As has been clarified above, however, the consent, if any, pertained to the missing goods and not to the damaged goods at all and in this respect the High Court does not appear to have appreciated the position correctly. The question then is whether the Hong Kong Ordinance of 1928, which presumably is expressed in terms similar to those of the English Act, at all applies to this contract? We find from the original Bill of Lading that the paramount clause, printed at the head of this documents, which could have incorporated the provisions of the Hong Kong Ordinance, as part of the terms of the Bill of Lading, was left without the blank space being filled in. The printed paramount clause is as follows:‑ The contract evidenced by this Bill of Lading is to have effect subject to the provisions of the rules as applied by the . . . Act or Ordinance as the case may be as if the rules were herein specifically set out. It is hereby expressly further agreed, in pursuance of the provisions of Article 7 of the Schedule to the said Act, that the Carriers' liability, prior to the loading on and subsequent to the discharge from the ship shall be covered by the conditions and exceptions of this Bill of Lading." This clause, in its incomplete condition, fails to incorporate the relevant provisions of the Hong Kong Ordinance, into the Bill of Lading. It is merely a printed clause which does. not appear to have been pressed into service at all. This was probably so because of the inclusion of clause 16 in the Bill of Lading, which provided that the proper law of the contract would be deemed to be English Law. In the circumstances, it is difficult to accede to the contentions raised on behalf of the appellants that Article 3(6) of the Schedule to the English Act, or a similar provision in the Hong Kong Ordinance, should be read as a part of the Bill of Lading. As has been observed above, the English Act, despite clause l6 of the Bill of Lading, does not in terms apply to the contract. We have not been referred to any other law of England which might apply to this contract. The Pakistan Carriage of Goods by Sea Act, 1925, is also not attracted to the case, as that measure, on, the face of it, applies to carriage of goods by sea, shipped from,, any port in the Provinces and the Capital of the Federation, to any other port, whether in or outside Pakistan. It would seem‑; therefore, that clause (6) of Article‑3 of the English Act or of the Hong Kong Ordinance or of the. Pakistan Act is not pertinent, ii the circumstances of this case. The suit having been brought in a Pakistan Court, whatever the substantive right of the parties may be, the lex fori would determine the procedural aspect of the dispute. The law o! limitation, governing the suit, consequently, would be Article 3(la of the First Schedule to the limitation Act, 1.908. This is in the following terms: Description Period of Time from which of suit limitation period begins to run 30.‑Against a carrier One year When the loss or for compensation injury occurs." for losing or injuring goods. The position, therefore, under this provision of law would be; almost identical to that which obtained under clause (6) of Article 3 of the Schedule to the Carriage of Goods by Sea 'Ac,.. The starting point of the limitation would obviously be in the present case, the 24th June, 1961, when the delivery was complete from the ship and she left the port. The loss or damage, if an. according to the concurrent findings of the Courts below, too place, either on that date or even earlier, while the carrier was charge of the goods, The terminus a quo of the limitation, then: fore, would be the 24th June, 1951, and the question, whether the. plaintiffs had knowledge of the arrival of the goods or not, seen. to be irrelevant. In that connection, it may also be observe that the plaintiffs are only assignees of the Habib Bank Limited who were the formal consignees and who bad apparently been given a notice of the arrival of the goods in port, on the 22nd of June, 1951. It was so held by the High Court and, it appears, on good evidence. However if the Pakistan Limitation Act applies, the question at once arises whether the plaintiffs are entitled to get the benefit of section 15 (2) of that Act or not. That subsection reads as follows :‑ "(2) In computing the period of limitation prescribed for any suit, of which notice has been given in accordance with the requirements of any enactment for the time being in force, the period of such notice shall be excluded." Mr. Tofazzal Ali, learned counsel for the plaintiff ‑firm, has cited, in support of his argument that this provision is available to his clients, a decision of the Dacca High Court, reported as Messrs United Oriental Steamship Co. v. Messrs Jamiluddin and others (P L D 1959 Dacca 164). The High Court distinguished this and some other cases, referred to them in this connection, on the ground that they related to shipment of goods from one port in Pakistan to another. The language of subsection (2) of section 15 of the Limitation Act, however, appears to be general in character and is apparently applicable to all suits, in which a notice, required by law, had to be given, prior to the institution of the suit. The point that falls for determination then is whether it was necessary for the plaintiffs to implead the Federation of Pakistan as a party to the suit, along with the appellants. It was the case of the plaintiff that he was entitled to recovery his loss either from the carrier or from the Federation of Pakistan which represents the Jetty authorities. The loss or damage had occurred by action of one or the other of these two defendants. The special facts and circumstances, bearing on this question, however, were not within the knowledge of the plaintiffs. They were only within the knowledge of the carriers or the Jetty authorities. The plaintiffs had, therefore, to bring their suit,, perforce, in the alternative, claiming damages from one or the other defendant whichever out of them was found to be liable, after a full determination of the facts by the Court. The allegations made in the plaint against the first two defendants were of a mixed character and could not be disentang led. The plaintiffs therefore could not take the risk of suing the carriers alone without impleading the Federation of Pakistan, representing the Jetty authorities. If they sued the carriers alone, on the assumption that they were responsible for the loss or damage, and eventually it was found that the responsi bility was that of the Jetty authorities, the plaintiffs were likely to be prejudiced when bringing a second suit against the Federation of Pakistan, owing to various defences open to the Federation, because of the splitting up of the action. Of necessity, therefore, both the defendants had to be impleaded in the same suit and this obviously also avoided multiplicity of proceedings. Consequently, it must be held that the Federation of Pakistan was a necessary party to the suit and, as it could not be said without the statutory notice under section 80 of the Code of Civil Procedure being given, the time as a whole must be deemed to have been enlarged by the period required by this notice, under subsection (2) of section 15 of the Limitation Act. We are inclined to uphold the view that prevailed in the trial Court, in this respect, in preference to the finding of the High Court. The notice was given before one year's limitation had expired and the suit was brought on the expiry of the two months' notice. The suit must, therefore, be regarded as having been brought within time. Even if it could be assumed that Hong Kong had passed a law, incorporating the international rules, according to the Brussels Convention known as the Hague Rules and that a provision similar to clause (6) of Article 3 must be deemed to apply to the contract, the appellants would be confronted with another hurdle. Section 11 of the. Limitation Act, which was referred to by learned counsel for the plaintiffs, provides as Suits instituted in the Provinces and Capital of the Federation on contracts entered into in a foreign country are subject to the rules of limitation contained in this Act. (2) No foreign rule of limitation shall be a defence to a suit instituted in the Provinces and the Capital of the Federa tion, on a contract entered into in a foreign country, unless the rule has extinguished the contract and the parties were domiciled in such country during the period prescribed by such rule." If the correct position be, as is contended on behalf of the appellants that under cl. (6) of Article 3 referred to above, after the expiry of one year from the 24th June, 1951, all liability of the appellants ceased and was extinguished, even then section 11 of the Limitation Act would, on the face of it, bar such a defence being raised, unless the second condition men tioned in subsection (2) thereof is satisfied, viz. that the parties were domiciled in the foreign country, during the period pres cribed by the rule. This was obviously not the case here as there was no allegation made at any stage that the plaintiffs were ever domiciled in Hong Kong. This provision of the Limitation Act does not appear to have been super seded by the Pakistan Carriage of Goods by Sea Act, 1925, which, as clarified earlier, applies to goods shipped from a Pakistan port to any other port. There is nothing in this Act which overrides the provisions of section 11 of the Limitation Act. This section represents, for Pakistan, a point of policy to which the international rule, contained in cl. (6) of Article 3 must give way in accordance with well‑recognised principles of Private International Law. In Private International Law Cheshire Fifth Edn , at p. 150 it is stated that "It is a well‑established principle that any action brought in this country is subject to the English doctrine of public policy" The learned author has explained that the foreign law would be excluded where it is repugnant to the distintive policy of the Municipal law of the country. It seems, therefore, that it is not open to the appellants to plead that their liability had been extinguished, by virtue of a provision in the foreign law, before the suit was brought by the plaintiffs. Further, it would seem that even under the English Law which admittedly governed the contract in the present case, the party against whom the claim is made, may elect to waive such a clause as has been set up on behalf of the appellants, or the party may, by consent, enlarge the stipulated time. This statement of the law appears under the heading "Waiver" at p. 145 of Carver's Treatise on the Carriage of Goods by Sea, Tenth Edition. There seems no adequate ground for allowing the appellants to get out of their own representation made to the plaintiffs, asking them to hold their hand on the assurance that their claim would not be allowed to be defeated by limitation, pending further investigation, in respect of the goods short‑delivered. Even if the inter‑national rule had applied, this clear representation could have been construed as a waiver of the relevant clause and, in any event, the mutual agreement inter partes to extend the time, should be regarded as bringing into effect a new contract between the parties by which they ought to be bound. This was so held by this Court in Abdul Jalil Chowdhury v. The Muhommadi Steamship Co. (P L D 1961 S C 340) Regarding the point that an agreement to extend, without consideration, would . he bad under English Law, it has been rightly pointed out by the High Court that the rigour of the rule has been mitigated even in England by Courts of Equity. It was observed by Lord Denman C. J., while dealing with a similar objection, in Stead v. Dauber ((1839) 10 Ad. & El 57 (66)). "Nor does any difficulty arise from the want of consideration for the plaintiff's agreement to consent to the change of days; fore the same consideration which existed for the old agreement is imported into the new agreement which is substituted for it." However the position that emerges in this case is that the Hague Rules had no application to the facts herein, as the contract was made subject to the laws of England and the provisions of the Hong Kong Ordinance of 1928 were not expressly made part of the Bill of Lading. In Carver's Book referred to above, the following proposition is laid down at "A bill of lading issued in Slate X, but which is governed by the law of the State Y, will not be subject to the Hague Rules unless :‑ (a) it expressly incorporates them, or (b) it is subject to them by a law of State Y (e.g., where the legislation of State Y applies to both inward and outward bills of lading and the shipment is to State Y)." If we read for State X, in this proposition, the Colony of Hong Kong and for State Y, Great Britain, it would be clear that, for want of express mention of the Hague Rules in the contract as well as on the ground that the English Law applies only to outward Bills of Lading, the Hague Rules will be excluded. The result of the whole discussion is that from whichever point of view the case is looked at, the appellants cannot succeed. The appeal therefore, fails and is hereby dismissed with costs. K. B. A. Appeal dismissed.