P L D 1968 Karachi 320 (PLP)

20. On the question whether the goods were shipped by s.s. "Sanbay" or not, no direct evidence has been produced by the parties. The case of the respondent No. I that the goods were not shipped is based on certain enquiries held by Messrs Johnson Stoke and Master their solicitor in Hongkong, but they have produced neither any documentary proof nor any other evidence in support of it. The position taken by them in 'the correspondence which passed between the parties discloses that they have been shifting their grounds. In the beginning they admitted that the goods had been shipped but were off‑loaded under the instructions of the appellant from s.s. "Sanbay". They even admitted in one of the letters that Messrs Mackinon Mackenzie & Co. had informed them that the goods were transhipped from s.s. "Sanbay" to s.s. "Warora" and were likely to reach at Chittagong. In subsequent correspondence they took up the position that the goods were never shipped and the bill of lading was a forged document. But the evidence on the record does not show that the bill of lading was a forged document or that the goods were not actually shipped.

21. On the question whether the appellant bad played fraud or made any misrepresentation there is only the bare statement of P. W. 3 Abdus Sattar. He admitted in cross-examination that he had no personal knowledge whether the goods which were purported to have been shipped under the shipping documents had at any time been shipped or‑ not, nor had he any personal knowledge about the goods being at any time in a warehouse or not. The question whether any such inference could be drawn on the evidence produced on the record will be discussed presently.

22. In their defence the Insurance Co. had not denied that insurance Policy Exh. 17 was issued by them. Another document Exh. X‑3 dated 25th August 1951 brought on the record shows that they had also covered the transshipment of the goods. It runs as under "In consideration of the fact that the within mentioned vessel s.s. Sanbay is unable to proceed to Chittagong, the cargoes insured under this Policy have been transhipped at Singapore per s.s. Warora sailing on or about 19th August 1951 to Chittagong and not as stated heretofore. Other terms and conditions remain unchanged." The learned Single Judge's finding is that this document has been sufficiently proved on the record and its effect on the liability of respondent No. 2 is an important point in this case respondent No. 2 examined only one witness namely D. W. Patrick George Ralph, the Karachi Branch Manager of the South British Insurance Co. He admitted the genuineness of the Insurance Policy, Exh.

17. He also admitted that the document Exh. X‑3 which purported to have been issued by Messrs Tai Ping Underwriters Ltd. (sic) were their agents at Hongkong, but was unable to identify their signature on it. In cross‑examination he was unable to say whether the Policy. Exh. 17 vas issued in anticipation of shipment. Further he was unable to say when his company came to know that the goods had not been shipped, nor was he able to say when his company came‑ to, know that the goods had not been sent from the warehouse for shipment.

23. It is in this background that we propose to consider the contention of the learned counsel for the parties. The most important question that would determine the fate of this appeal is whether the finding of the learned Single Judge that the bill of lading is a forged document can be held to be Cased on proper appreciation of the evidence on the record. It is pertinent to note that the learned Single Judge felt diffident to give any definite finding on this point. In this connection he observed: "The onus of proving it as forged or non‑genuine was on those who wanted to prove it to be so, but a strange situation has been created in the circumstances of this case in view of the fact that the plaintiff has alleged in para. 5 of the plaint that it is a forged document, and Mr. Permanend has objected (see my note recorded during the ' course of the evidence of Abdullah P. W. 1) on behalf of the insurance Company to it3 acceptance as good piece of evidence. The stand of defendant No. 1 is nothing more than it was received in the ordinary course of business. There is one fact which throws a serious doubt on its genuineness : it is that it purports to disallow transshipment which term has certainly not teen observed even if the goods had been shipped, because the ship on which, according to the document, the goods were placed as bound to Chittagong, never called at the port of Chittagong. If the information of the plaintiff contained in the letter (Exh. 32) is correct that contrary to the condition that there was to be no transhipment, the goods were taken off s.s. "Sanbay", then a breach of the terms of the document was committed. The conclusion, therefore, should be that the bill of lading is either a forged document or the course of its operation was broken off by unwarranted and unauthorised means." ' It will be noticed that the bill of lading was found as forged document on, two grounds. Firstly because the goods were never received at the port of destination 'namely at Chittagong ; and secondly, because transhipment was prohibited under the terms of the Bill of Lading. With respect it is difficult for us to reach at any such conclusion on the above reasoning. It is unnecessary to mention that the question whether a document is a genuine or forged one depends on the fact whether it was issued by the party purported to have signed or issued it. No such inference can be raised simply because its terms are not fulfilled by the party concerned.

25. Moreover in c. i. f. contract it is well established rule that the obligation of the seller is only first to make out an invoice of the goods sold ; secondly, to ship at the port of shipment goods of the description, contained in the contract ; thirdly, to procure a contract of affreightment under which the goods will be delivered at the destination con templated by the contract ; fourthly, to arrange for an insurance upon the terms current in the trade which will be available for the benefit of the buyer and fifthly, with an reasonable despatch to send forward and tender to the buyer these shipping documents, namely, the invoice, bill of lading and policy of assurance. The law is that the delivery or these documents to the buyer is symbolical of delivery of the goods purchased, placing the same at the buyer's risk and entitling the seller to payment of their price. In the present case .the evidence shows that all the above essential ingredients were performed by Messrs Richard & Co. of Hongkong. After placing the order of the appellant opened a letter of credit for the performance of the contract and later on retired the above documents relating to the goods in dispute from the Chartered Bank Ltd., Karachi through their bankers Messrs Habib Bank Ltd. Before retiring these documents they negotiated the sale of these documents with respondent No. I. After retiring them the documents were endorsed in favour of respondent No. 1 and on the delivery of these documents they were paid the price of the goods. Thus it is not one of those cases where the appellant can be said to be responsible for the shipment of the goods or had any hand in their shipment or in the prepara tion of the various documents which are the subject‑matter of the suit. In these circumstances we have found much force in the contention of Mr. Jan Muhammad Daud that the appellant firm acted in good faith and cannot be saddled with any responsibility of misrepresentation or fraud in the shipment of goods from Hongkong to Chittagong. In fact, there is not an iota of evidence on the record to support the finding of the learned Single Judge that 'the appellant bad made any misrepresentation or played fraud on respondent No.

1. The appellant's dealings with respondent No. 1 were in the ordinary course of business and on the evidence placed on the record it is not possible to hold that they bad been guilty of any fraud or mis representation.

26. It was urged by Mr. Bhojwani, the learned counsel for respondent No. 1, that the contract in dispute was entered into on an assurance given by the appellant that the goods bad been shipped; and as the goods bad not been delivered, the appellants were rightly held to be liable for the refund of the amount paid to them. There is however nothing to show that any such 'assurance was given. The alleged representation of the broker that the goods had been shipped cannot be divorced from the context in which it was made. According to the appellant the indentor informed them that the goods had been shipped and this fact is borne out by the bill of lading Exh. X. Since the bill of lading and other documents were received through the proper channel and the appellant retired these documents through the bank, there was prima facie evidence of the fact that the goods had been' shipped by s.s. "Sanbay" It is quite correct that such statement in the bill of lading is not a conclude we proof, in law if respondent No. 1 wanted to challenge this fact recorded in the bill of lading it was their duty to lead evidence in proof of their allegation that the goods had not been shipped but no such evidence was led by them. That this is the correct position in law is supported by the statement of law on this point in Serutton's Charter‑party. At page 60 the learned Author has stated: "The master or broker cannot bind the owner or principal by signing bills of lading for goods that were never shipped at all; but the bill of lading is prima facie evidence that they were shipped, and the burden of disproving it lies on the owner. But where the statement of the amount or quantity of the goods in the bill of lading is qualified by such words as "Weight or quantity unknown", the bill of lading is not even prima facie evidence against the ship owner of the amount or quantity shipped, and the onus is on the cargo‑owner of proving what in fact was shipped." At page 156 the learned Author has further stated: "A statement in the bill of lading that goods were "shipped in good order and condition" although not words of contract, will estop the shipowner against an indorsee for value of the bill or against a person rightfully present ing the bill of lading and taking delivery thereunder from proving that they were not in apparent good order and condition, unless it was clearly known to the indorsee or person presenting the bill that the statement was untrue, or is proved that he did not act upon the faith of the statement. In the absence of. contrary evidence the fact that the holder of a bill of lading containing such a statement has talon it without objection is sufficient to show that he relied upon it."

27. In Aain Steamship Company Ltd. v. Herdman and McDougal ((1922)2LLR58(HL)) the House of Lords held that the statement in the bill of lading is not to be displaced by a consideration of‑ the balance of probabilities. This enunciation of law has also been adopted in section 39 of the Sale of Goods Act which is reproduced, below:

"39. (1) Where, in pursuance of a contract of sale, the seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of trans mission to the buyer, or delivery of the goods to a wharfinger for safe custody, is prima facie deemed to the a delivery of the goods to the buyer. (2) Unless otherwise authorised by the 'buyer, the seller shall make such contract with the carrier or wharfinger on behalf of the buyer as may be reasonable having regard to the nature of the goods and the other circumstances of the case. If the seller omits so to do, and the goods are lost or damaged in course of transit or whilst in the custody of the wharfinger, the buyer may decline to treat the delivery to the carrier or wharfinger as a delivery to himself, or may hold the seller responsible in damages. (3) Unless otherwise agreed, where goods are sent by the seller to the buyer by a route involving sea transit, in circumstances in which it is usual to insure, the seller shall give such notice to the buyer as may enable him to insure them during their sea transit; and if the seller fails so to do, the goody shall be deemed to be at his risk during such sea transit." Under the Bill of Lading Act, 1856, every consignee of goods, named in a, bill of lading and every endorsee of a bill of lading to whom the property in the goods therein mentioned shall pass, upon or by reason of such consign ment or endorsement shall have transferred to and vested in him all rights of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself. Thus the endorsee can both sue or be sued by the carrier upon the bill of lading. In this state of the law it was incumbent on the respondent No. 1 to prove that the goods had not been shipped. The onus was on them and since they have failed to discharge this onus, it is not possible to hold that the goods were no 6 shipped by s.s. "Sanbay" or the bill of lading was a forged document.

27. It seems to us that the contract between the parties being a c. i. f. contract, the appellant in law had discharged their responsibility by endorsing the documents of title to the goods, namely, the invoice, the bill of lading and th insurance policy in favour of respondent No.

1. If the goods had not been received at Chittagong or had been lost on the way or sere transhipped by the shipping company on the say no responsibility for that can be fixed on the appellant firm. Ibis view is fortified by the following comment of Scrutton on Charter‑parties at page 177 (17th Edn.). "From the fact that the contract is performed by the delivery of documents it results that various rules in the Sale of Goods Act, 1893, which is primarily drafted in relation to the sale and delivery 8f goods on land, can only be applied to c. i. f. sales mutatis mutandis. And there may be cases in which the buyer must pay the full price for delivery of the documents, though he' can get nothing out of them, and though in any intelligible sane no property in the goods can ever pass to him, i.e., if the goods have been lost by a peril excepted by the bill of lading, and by a peril not insured by the policy, the bill of lading and the policy yet being in the' proper commercial form called for by the contract." This aspect of the question was considered by Davis J. C. in Malabar Steamship Co. v. Central Bank of India (A I R 1939 Sind 225). In this connection the learned Judge observed at page 229 as under :‑ "Now a bill of lading is .a document of title ; it is a symbol of the goods ; it represents the goods themselves, and it appears to us that as a document of title it is a document of title to specified goods in specified place and that a pledge of goods not on board ship by way of the pledge of the bill of lading is no more a pledge of goods on board the ship than the deposit of the keys of were house B in which the pledged goods are not stored would transfer possession or evidence a pledge of goods stored in warehouse A. A bill of lading is a document of title signed by the shipowner or by the master or other agent of the shipowner which states that certain specified goods have been shipped upon a particular ship and which purports to set out the terms on which such goods have been delivered to and received by the ship. This is the defini tion given in Halsbury, Vol. 26, para. 229, p. 144 and it is the definition generally accepted, and the bill of lading is a symbol of the right of property in the goods specified therein. Its possession is equivalent to the possession of the goods themselves, and its transfer being a symboli cal delivery of the goods themselves has by mercantile usage the same effect as an actual delivery in the circum stances. On a transfer therefore of a bill of lading by way of sale, mortgage or pledge, the property in the goods passes either absolutely or otherwise according to the intention of the parties to the transferee provided that the transferor was competent to dispose of the goods ; Halsbury, Vol.. 26, pp. 146,

147. But we think these attributes attach only to a true bill of lading and not to a false bill of lading, to goods shipped and not to goods intended to be shipped, and that an essential condition of the operation of a bill of lading as a document of title and as a symbol of the goods is that the goods are on board as the bills of lading certify, for if it were to be held that the pledge of a false bill of lading passed any property in the goods, the indorsee of such a bill would not know if his goods were in Karachi or in China or Peru. It appears to us essential for the purpose of commerce that a necessary condition of the operation of a bill of lading as a document of title is the receipt on board the ship of the goods which the bills of lading cover and which it is so declared in the bill itself." Earlier the learned Judge observed: "Now there is no direct authority on this question, and so far as the shipping Company is concerned, the principle of estoppel is a complete answer to the Shipping Company's defence and renders as regards them any consideration of this question unnecessary, but it is the shipowner only who is estopped from questioning the statements in the bills of lading, not third parties, and Mr. Lulla appearing for the Shipping Company argues that he can press the claims of the Bank against the goods in the possession of the unpaid vendors or against the unpaid vendors them selves. They are tied, he said, by equities." This being the position in law the respondent No.1 being the endorsee of the bill of lading were estopped in law to challenge the statement in it that the goods had been shipped. At any rate if they wanted to challenge this far it was necessary and incumbent upon them to disprove it by reliable evidence. Since in the present case no such evidence was led by respondent No. 1, it is not possible to hold that the goods were not shipped by s.s. "Sanbay". Besides, the information conveyed by Messrs Mackinon Machenzie & Co. to the respondent No. 1 that the goods had been transhipped from s.s. "Sanbay" to s.s. "Warora" and that it would be shortly reaching at Chittagong is an important circumstance to establish the fact that the goods had been shipped by s.s. "Sanbay". The document Exh. K‑3 which is also proved on the record clearly shows that the goods in dispute were transhipped from s.s. "Sanbay" to s.s. "Warora" on the way from Hongkong to Chittagong and that respondent No. 2 company had issued an endorsement amending the insurance Policy in respect of such goods.

29. It was urged before us that the transhipment of the goods from s.s. "Sanbay" to s.s. "Warora" was in violation of the terms of the bill of lading and, therefore, the appellant was rightly fixed with the responsibility of the non‑delivery of the goods. This contention of Mr. Bhojwani has not in the least impressed us. There was nothing unusual when the goods were transhipped from s.s. "Sanbay" to s.s. Warora", In certain circumstances this is an unquestionable right of the shipping Company. The law on this point is discussed by Scrutton on Charter Parties at page

271. This is what the learned Author states :‑ "Where the shipowner is prevented from completing the contract voyage by a peril which cannot be overcome in a reasonable time, or by damage which cannot be repaired at a reasonable expense, he is not bound either to repair or tranship; though, if he elects to do neither, he must hand over his cargo to the cargo‑owner freight free, or if the cargo owner is not present to receive it, and cannot be communicated with, the master must act for the best as the cargo owner's agent. He has, however, the right to earn his freight either by repair ing his own ship and proceeding to the port of destination, or by transhipping the goods into another vessel to be forwarded thither, and he may delay the transit a reason able time for either of these purposes. If 'he spends an unreasonable time in making up his mind which course to adopt, and the cargo is damaged during the delay, the shipowner will be liable to the, cargo‑owner for the damage. In case of justifiable transhipment by the master as agent for the shipowner, the cargo‑owner will be bound to pay the full freight originally contracted for, though the tran shipment was effected by the ship‑owner at a smaller freight." The learned Authof has further stated : "If the hindrance of the ship's voyage is not caused by an excepted peril, the shipowner is not entitled as of right to tranship on his own account on terms more onerous to the shipper than the original contract (thought he may be bound to do so on account of the cargo‑owner); but he is liable for delay or failure to deliver." Thus even in cases where the hindrance of the ship's voyage is not caused by an excepted peril the ship‑owner is only liable for delay or failure to deliver and to compensate for terms more onerous to the shipper in transhipment But this only is the responsibility of the Master of the ship and not of the person who has further endorsed the bill of lading in favour of a third party. However in the present case transhipment was permissible under clause 17 of the Bill of Lading which is in the following terms: "

17. Transhipment Cargo.‑Cargo for ports and at which this steamer does not call will be transhipped at the Company's discretion, subject to all the conditions required by the vessel or vessels completing the transit. All tran shipment to be at the expense of the steamer, but at the risk of the owner of the goods." Even earlier in the document the Shipping Co. had reserved for itself the `right' to tranship and forward cargo by any means at the discretion of the Company whenever made necessary by abnormal or special circumstances. Thus nothing hinges in this case on the transhipment of goods at Singa pore.

30. It was next contended before us that this is a case in which the appellant is guilty of misrepresentation, mechanisation and‑ fraud in the shipment' of the cargo. Mr. Bhojwani was unable to refer to any evidence on the record to help us in arriving at any such conclusion. No such inference can be drawn from the circumstance that the goods were transhipped from s.s. "Sanbay" to s.s. "Warora" against the terms of the bill of lading. The appellant cannot possibly be accused of any such allegation because he is neither the shipper of the goods nor had he any business at Hongkong. His position is that of an innocent importer of goods from Hongkong, who retired the document of the title to the goods through the proper channel and cannot be charged with any such accusations. The non‑delivery of the goods is not such an extraordinary feature or circumstance from which such an inference can be drawn. There have been a number of cases in which, in spite of the fact that the goods have been shipped, the goods did not reach its destination. In this connection it will be interesting to refer to a Madras case reported in Home Insurance Co. Ltd. New York v. Ramnath & Co. (A I R 1155 Mad. 602). In that case nine drums of certain commodity were shipped at Bombay for Madras on the deck at the shipper's risk. Goods were not traced at Madras nor could the shipping company account for their total loss. In a suit by the consignee, the shipping company claimed to be absolved from liability by the above saving clause in the bill of lading. In that case also it was urged by the Insurance Co. that they were not bound to compensate for the loss of the goods. This contention was repelled on the following observations: "Merchants, insure the goods with the Company to cover any risk in their being safely landed at the port of destina tion, and if the goods are not so landed, when once they were put on board, and if the loss of the goods ‑has arisen, then certainly it is a loss and a misfortune which is covered by the terms of the insurance policy. The insurance company cannot, therefore, be exonerated from its liability to honour its obligation to the 'insured, in the case of the total loss of goods insured." These observations were made against an Insurance Company but it will be noticed that in spite of the fact that the goods were shipped at Bombay and did not reach at Madras yet this was not treated as mechanisation amounting to fraud so as to exonerate the Shipping Company from its liability. In order to prove the allegation of mechanisation or fraud it was necessary on the part of respondent No.1 to lead convincing evidence to prove this fact, but no such evidence was led. In fact it is strange that respondent No. I did not even implead the shipper and shipping company a party to the suit. It is stated that they were informed of the fraud of Richard & Co. by their solicitors at Hongkong but no evidence worthwhile was produced even to support this fact. They are represented by a leading firm of Lawyers. In the absence of any cogent explanation for not impleading proper or necessary parties they must bear the consequences. We have already adverted to the fact that even the learned Single Judge's finding on this aspect of the case is not definite. We find much force in the argument of the learned counsel that conclusions based on surmises and conjectures are not permissible in law. We would, therefore, hold that the respondent No. 1 had failed to establish that the goods were not shipped by s. s. "Sanbay" or that the bill of lading was a forged document or any fraud was played on them. In these circumstances no responsibility for the loss of the goods can be fixed on the appellant.

31. It was urged before us by Mr. Bho1want case this Court comes to the conclusion that the finding of ‑the learned Single Judge that the goods were not shipped by s.s. "Sanbay" is erroneous for the respondent No. ‑2 should be held responsible for the loss. In reply Mr. Permanand, learned counsel appearing for the Insurance Co., raised the following points :‑-- (1) Onus of loss is on the plaintiff. (2) The claimant must prove that Richard. & Co. had insurable interest in the goods. (3) That the risk attached on the goods leaving the warehouse. (4) That some casualty or accident happened. (5) Bill of lading is no evidence of shipment against the insurer. (6) Assuming there was shipment there is no proof of non‑delivery. (7) Respondent No. 2's liability is only to the extent of 12900 lbs. at the rate of exchange prevalent when the suit was filed. The learned counsel contended that so far as strangers ate concerned, particularly the Insurance Companies, they are not bound by any statement in the bill of lading about the shipment of the goods. In order to make them liable, it is necessary for a plaintiff to establish that the goods were in fact shipped as mentioned in the bill of ladings. In our opinion points 1 to 4 are interconnected. There is much force in the contention of the appellants counsel that on ft is found that the goods were shipped by s.s. "Sanbay", there will be a presumption that Richard & Co. had insurable h interest in the goods in dispute, that they left the warehouse and that as the goods did not reach its destination th plaintiffs have suffered the loss. Thus the most important question for decision in order to make the Insurance Co. liable for the loss is whether the goods in dispute were shipped by " s.s. "Sanbay". The respondent's learned counsel contended that there is no direct evidence about the shipment of the goods. In order to discharge the onus and to prove loss it was necessary for respondent No. 1 to prove the insurable interest of the insurer and for proving that the risk attached to the goods in dispute it should have been further proved that they had left their warehouse. According to the learned counsel the bill of lading is only conclusive evidence against the master of the ship and the shipper. It is prima facie evidence against the ship owner on the assumption that the agent has not exceeded his authority, but it has no value against the Insurance Co. In support of his contention the learned counsel has relied on para. 1267 of Vol. 10 of Arnould on Marine Insurance. At page 1244 the learned Author states :‑-- "It must be remembered that, even against the ship owner, the bill of lading is not more than prima facie evidence of the shipment of the goods. In an action on the policy, being merely an acknowledgment by the master, it is no evidence without authentication and some proof that the goods specified in it were actually shipped on board."

12. In support he further relied on two decisions of the English Court :‑ (1) M'Andrew v. Bell 170E R 389; (2) Gibbon v. Featherstonhaugh 171 E R

455. None of these cases are of any help to the Insurance Co. The discussion in the above para. shows that very slight" evidence to prove this fact is required. In Johnson v. Ward (170 E R 820) a clerk in the. Custom House produced the copy of an official paper containing an account of the cargo as examined by the Searcher to prove that the goods insured were shipped, the official paper went with the ship and the copy was kept at the Custom House. This was accepted as goods evidence without calling the Searcher.

33. Though we find much force in the learned counsel's contention that in cases against Insurance Co. it is necessary for the plaintiff to prove that the goods were shipped, but in our opinion very slight evidence will be sufficient to prove this fact. In the present case it is quite correct that there is no direct evidence that the goods were shipped, but the documents Exh. X‑3 which has emanated from the proper channel and which is signed by the agent of respondent No. 2, company leaves no doubt in our mind that the goods were shipped by s.s. "Sanbay" and were later on transhipped by s.s.. "Warora": Had this not been the case there was no occasion for issuing the document Exh. X‑3 in which the Insurance Co. admitted that the goods insured under the policy have been transhipped at Singapur per s.s. "Warora" sailed on or about 19th August 1951; to Chittagong. It was urged that this document is not binding on respondent No. 2 company bat Mr. Permanand was unable to give any satisfactory reasons for it. In order to prove that this document did not contain the true facts it was necessary for respondent No. 2 to lead evidence to show the circumstances in which it was issued or to explain that its contents were not based on the knowledge of the agent ; but no such evidence was led. In fact the witness examined on their behalf expressed his utter ignorance about the facts of the case. He was not in a position to say whether the goods were shipped or not shipped or whether the goods were transhipped or not transhipped. He did not even have the courage to deny that the document Exh. 3 did not bear the signature of the agent. In such circumstances this document clearly proves that respondent No. 2 company had issued the above endorsement after the goods have been transhipped from s.s. "Sanbay" at Singapore per s.s. "Warora." The only legitimate inference from. this would be that the goods were shipped by s. s. "Sanbay" at Hongkong and were carried up to Singapore. 1n the face of this important circumstance we are clearly of the view that the respondent No. 2 cannot escape their liability on this ground as admittedly the goods were not delivered and safely landed at the port of destination.

34. Earlier we have referred to the observation of Bashir Ahmed J. in Home Insurance Co.; New York v. Aamnalh & Co. that merchants insure the goods to cover any risk in their being safely landed at the port of destination and if the goods are not safely landed, when once they were put on board the ship the insurance Co. cannot be exonerated from honour ing its obligation to the insured. In this connection in British and Foreign Marine Insurance Co. Ltd. v. Gaunt (1921 A C41). Lord Birkenhead observed at page 47 as under :‑-- "The inference remains that it was due to some abnormal circumstance, some accident or casualty. We are, of course, to give effect to the rule that the plaintiff must establish his case, that he must show that the loss comes within the terms of his policies ; but where all risks are covered by the policy and not merely risks of a specified class or classes, the plaintiff discharges his special onus when he has proved that the loss was caused by some event covered by the general expression, and he is not bound' to go further and prove the exact nature of the accident or casualty which, in fact, occasioned his loss. In this case the respondent established that the loss must have been due to some casualty, and consequently the judgment of the Court of Appeal upon this point is right."

35. Considering the question under consideration in this light, it is abundantly clear to us that all the objections raised by the Insurance Co. must fall to the ground. The logical conclusion of the finding given by us that the goods were shipped by s.s. "Sanbay" is that Messrs Richard Co. had an insurable interest in the goods, that the goods in dispute left their, warehouse and as the goods in dispute did not land at Chittagong, its non‑delivery is sufficiently established. It is not disputed that all risks are covered by the Policy. We would therefore, hold respondent No. 2 liable for the loss of the goods in dispute.

36. Mr. Permanand learned counsel appearing for the respondent Insurance Co. did not challenge the legal position that under Order XLI rule 33, C. P. C. it is open Court in order to this adjust the rights of the parties according to justice, equity and good conscious to pass such decree as ought to have been passed even if it would be against parties against whom no appeal has been filed by respondent No.

1. The learned counsel however, contended " that respondent Insurance Company could not be burdened for the entire claim and its liability is limited in the sum of 12,980 lbs. He further contended that the loss occurred in 1951 though respondent No. 2 was impleaded as party, on a 7th September 1952. According to him respondent No. 1 is entitled to .be compensated at the rate of exchange prevalent in October 1951. In support of his contention he relied on a decision of the Supreme Court in The Central Bank of India v. Muhammad Aslam Khan (P L D 1962 S C 251 at pp. 258‑259). In this connection their Lordships observed as under :‑

"On this principle, the English Courts have engrafted another one of procedure; according to which an English Court cannot order payment of a sum of money expressed in Foreign currency. Dicey's Book discusses this at p. 723 et seq. Claims for, payment of debts or of damages have to be translated into sterling for the purpose of proceedings in an English Court, by virtue of this Rule. The rate of conversion which has to be used is, in the case of damages for breach of contract, that prevailing on the day when the breach occurred, and in the case of damages for tort, the rate of exchange pre vailing when the loss or expenditure was incurred, for which the plaintiff claims compensation. In the case of liquidated debts, the rate of exchange of the day when the debt was payable, would be applied. Dicey expresses the opinion that there are conflicting decisions on the latter point and that the matter is not yet settled. This, however, appears to be an erroneous view, although it further stands embodied in Dicey's sub‑rule (3.) of rule

165. Dicey apparently favours "the judgment day rate." His sub‑rule (3) of rule 165 has been criticised as open to exception in a recent English judgment, reported as Re: Russian Commercial and Industrial Bank. Cheshire in his Private International Law, Third Edition (pp. 857 and. 858) states that "It is now well settled that the relevant date is the date of the wrong" and not the date of judgment and that this rule "applies not only to an action for tort, but also to an action for breach of contract, or for the recovery of a liquidated debt or for an account, or for the non‑payment of a promissory note or a bill of exchange." In any event, it is the lex fort which governs the situation. It is clear that if the Bank had to sue on the date of maturity of the bills, it could only do so in terms of Pakistan currency and that would be the relevant date for convert ing the foreign currency into the currency of payment. The general principle is that a debt may normally be discharged in the currency of the place of payment‑see Auckland Corporation v. Alliance Assurance Co. Ltd. In the absence of any indication to the contrary, the parties would be presumed to have intended to measure the obligation by the currency of the place where the debt is payable, vide Dicey p.

737. This is also expressly stated by Dicey in rule 164 at p 740, wherein it is added that the rate of exchange at which the money of account must be converted into the money of payment is determined by the proper law of the contract or other law governing the liability. In the Comments under. this Rule, at p. 742, the following remarks occur :‑‑ "The rate of exchange would be that at which notes of the money of account can be obtained on the day of the maturity of the debt at the place of payment. There is, however, no authority on these points, and the solution here put forward is based on what are thought to be conclusions from general principles. It may be added that the terms of the contract under consideration are in accord with this conclusion derived from general principles and it appears that the decision reported as Graumann v. Tretiel affirms the principle. The position, therefore, under the English or International rules dues not appear to be different from that which would obtain on a consideration of the Pakistan law."

37. This being the legal position we are satisfied that respondent No. 2's liability is limited only in the sum of 12,9801bs., which they are liable to pay at the exchange value at the material time namely in October 1951. It is admitted that at the material time the exchange value of the pound in Pakistan was Rs. 9‑4‑6 and calculating the above amount at this rate they are only liable to pay Rs. 1,20,470‑10‑0 towards the claim of the respondent No.

1. We would, therefore, in exercise of the power vested in this Court under Order XLI, rule 33, C. P. C., pass a decree against respondent No. 2 in favour of respondent No. 1, for Rs. 1,20,470‑10‑0 with proportionate cost and interest at 6 % from the date of the suit till its realization.

38. Before parting with this case we must confess that on the allegations made in the plaint that the good were not shipped by s. s. "Sanbay", we found it difficult to burden the Insurance Co. for the claim in dispute: In fact for all the complications that have arisen in this case the blame can easily be cast 'on the pleadings filed on behalf of the respondent No.1, in spite of the fact that they had the advice of a leading lawyer's firm at Karachi. It is amazing that though the plaintiff‑respondent No. 1 did not possess any reliable material to support the above allegation such serious allegation was made in the plaint without even realizing that for a party, who is in the position of 'an indorsee of the bill of lading, it would be almost impossible to prove it. Moreover, there is no explanation as to why Richard & Co., the shippers, and Messrs King Tai Shipping Co. were not impleaded as defendant to the suit, whose presence was at least necessary for finding out the true facts, There can be only two reasons for this laxity. Either the plaintiff‑respondent on account of business jealousy wanted to run down the appellant firm or they did not get proper legal advice. Whatever may be the reason it has left a very unhappy impression on our mind and but for the fact that respondent No. 1 being in the position of an endorsee could not have any personal knowledge of such allegation, the might have lost their remedy against the Insurance Co. for making assertion in the plaint on the information derived 'from their Solicitors firm at Hongknong without realizing its legal consequences. They failed to notice that in such cases the broad principle that is followed is that the transaction being a banking transaction of the most ordinary and norm character, the presumption of good faith would be sufficient proof to discharge the burden. In Nippon Yusen Kalsha and Ramjiban Serowgee (65 I A 263) the Judicial Committee on this aspect of the case observed at page 284: "Even assuming that the onus of proof under the section is on the appellants, it would seem that they discharged it by the evidence of the Bank, which showed that the transaction was a banking transaction of the most ordinary and normal character. If it were necessary to look further the presumption of good faith would complete the proof. But the onus would have lain with the defendants. There are in the section two separate provisos. The onus of proof under the second proviso cannot, it seems, be on persons in the position of the defendants, land if so, it would seem to follow that the onus as to the first proviso must likewise rest in the same quarter. Otherwise an anamalous result would follow. Decisions under other statutes have been cited. But it is always dangerous to seek to construe one statute by reference to the words of another. It may well be that in this section the plaintiff who seeks to impugn what is ex facie a valid disposition should be held to, assume the burden of showing bad faith and such other matters as the provisos require to be established in the particular case." However, they must thank the appellant for, at least getting the Insurance Co. impleaded as a party to the suit in order to enable them in the alternative to claim the loss suffered from them. We would only hope that in future such lapses shall be avoided by the lawyers advising such parties unless of course there is reliable evidence to embark in making such allegations, which if absent in the circumstances discussed above would be difficult to establish.

39. In the result, subject to the above remarks, the appeal is allowed with costs throughout. A.H Order accordingly.