P L D 1962 (W (PLP)

WAHIDUDDIN AHMAD, J.‑The plaintiff‑appellants have filed this regular Second Appeal against the judgment of Mr. Feroze Nana Ghulam Ally, the then District Judge Karachi, in Civil Appeal No. 37 of 1958, dated the 13th September, 1958. By this judgment the learned District Judge held that the respondents were not liable to compensate the appellants for any loss that they sustained in respect of the consignment of rape‑seed shipped by them from Karachi to Chittagong by s. s. "Fausta" belonging to the respondents, and dismissed their appeal. The dispute between the parties is in respect of 8,768 bags of rape‑seed shipped from Karachi to Chittagong by respondents ship s. s. "Fausta" in April, 1955. Out of this consignment some of the bags; were, landed at the Port of discharge in a damaged condition and some of the goods were short‑landed. Thereupon, the appellants; applied to the Agents of the respon dents, Messrs James Finlay & Co., before the removal of the goods for their survey. The survey was held on 8thJune, 1955. By the survey report, dated 25th July, 1955, it was found that 100 bags containing 187 Mds. 4 Srs. of rapeseed was in damaged condition and 12 Mds. 35 Srs. of rapeseed was short‑landed. The Surveyors assessed the damage at 50 per cent of the total damaged goods. The appellants accepted this report and claimed damages in the sum of Rs. 2,472‑4‑0 as price of 93 Mds. 22 Srs. of damaged goods at the rate of Rs. 26‑8‑3 per Md. They further claimed a sum of Rs. 341‑8‑0 at the said rate for the shortage of the goods. The appellants claimed a total sum of Rs. 2,820‑12‑0 for the loss caused to them in suit No. 27 of 1956. The suit was resisted on behalf of the respondents. They repudiated their liability and maintained that some of the bags in dispute were damaged by rain after they had been delivered from the ship's tackle into lighters at the outer anchorage, Chitta gong, and some of the bags were damaged by inherent vice, but denied the number of bags damaged and the extent of the alleged damage. They denied their liability for the alleged damage and contended that their responsibility to carry the goods in suit from Karachi to deliver them at Chittagong has been exting uished, because they had duly discharged the goods from the tackle of the ship. On the pleadings of the parties as many as 7 issues were struck by the learned Subordinate Court Mr. Mehdi Ali Siddiqui, who was then First Class Sub Judge at Karachi, by judgment dated 13th December, 1958, dismissed the appellants suit. He held that the number of the bags damaged was 100, and the appel lants were entitled to claim damages at 50 per cent of the total goods of

187. Mds. 4 Srs: He further held that there was a shortage of 12 Mds. 35 Srs. and the loss was not caused due to inherent vice. On issue No 3, i.e., "what loss in terms of money has been caused to the appellants on account of the said damage", the learned Subordinate Judge in the body of the judg ment observed that the appellants had failed to prove the damages in terms of money, but, in recording his finding on this issue he held that the loss in terms of money amounted to the sum claimed in the suit. On issue No. 4, i.e., "whether the respondents are liable to compensate the appellants for the loss caused to the appellants" he held that the respondents were not liable to com pensate the plaintiff‑appellants for any loss. On appeal, the learned First Appellate Court did not discuss the question of the quantum of damages, but agreed with the view of the learned Subordinate Judge that the respondents were not liable to compensate the appellants for the loss caused to them in respect of the goods found damaged as they were completely exonerated under the terms of the bill of lading. The learned Appellate Court held that the damage to the goods in question was caused by rain water when the cargo had left the ship's tackle and in such cases, on the terms of the bill of lading, there was no responsibility of the owners of the ship. He further agreed with the view of the Subordinate Judge that the shortage of the goods was not due to any fault on the part of the respondents. The appellants have challenged the concurrent finding of the learned subordinate Courts on the above‑mentioned question in this appeal before us. In order to appreciate the contentions of the learned counsel for the parties, it would be proper to give brief facts of the circumstances in which the appellants claim for damages arose before the learned subordinate Courts. Messrs Adam Ltd., the appellants, shipped 8,768 bags of rapeseed packed in double bar dana gunny bags from Karachi to Chittagong on board the s. s. "Fausta" belonging to the respondents under a bill of lading dated the 1st and 5th April, 1955. The ship belonging to the respondents reached the outer anchorage of Chittagong Port on 20th April, 1955. In order to lighten its load for reaching the Chittagong Port jetties, on 21st April, 1955, it employed four lighters for the discharge of the goods. Some of the goods were discharged into those lighters on 21stApril, 1955. But it is in evidence that none of the goods in question were discharged into the lighters so employed. The ship shifted to the Chittagong Port jetties on 25thApril, 1955. Thereafter, the ship started discharg ing the goods both on the jetties and over-side into the lighters. On 17th May, 1955, the goods in question were discharged into the lighter "Rapida". These goods were discharged by "Rapida" between 4th June, 1955 and 6th June, 1955. It is not disputed before us that the respondents' ship "Fausta" which reached Chittagong Port on 20th April, 1955, came on the jetty on the 25th, and left Chittagong Port on the 27th May, 1955. The evidence of D. W. 1 Capt. R. F. William Lagoni, leaves no doubt in our mind that the damage was not caused to the goods in ques tion before their discharge into the lighter "Rapida". Capt. Lagoni, in his statement in Court, has stated in unmistakable terms that when the goods were on board the ship, proper care was taken to protect them from rainwater. According to him, the hatches were closed and tarpaulins were laid when it rained, and that there was no possibility of the rainwater going down into the hatches. Mr. Naumani, the learned counsel for the appellants, has not been able to advance any cogent reason for not accepting the statement of this witness. There is a concurrent finding of fact on this question. We are further satisfied that the view of the learned sub ordinate Court that the damage to the goods in question was caused by rain after they were discharged on the Chittagong Port jetty cannot be accepted. This was not the case of the respondents before the learned subordinate Court. On the other hand, in paragraph 5 of the written statement, it was clearly admitted that some of the bags in dispute were damaged by rain after they had been delivered from the ship's tackle into lighters at the outer anchorage of Chittagong Port. It was not the case of the res pondents before the learned subordinate Court that the damage caused to the goods in question by rain happened after the goods were discharged on the jetties at the Chittagong Port. At our request, Mr. Patel, the learned counsel for the respondents, took us through the entire evidence on the record. It shows that the goods in question were loaded on "Rapida" on the 17th of May 1955, vide the documents Exh. C/51 and C/52. The evidence further disclosed that these goods were discharged by "Rapida" between the 4th June and 6th June, 1955, vide the documents Exhs. C/62, C/63, and C/64, tally slips issued by the Port Trust Authorities on the discharge of the goods. These tally slips establish beyond doubt that when the goods were discharged at the jetty in Chittagong Port, they were found to be damaged by rain. This fact is mentioned in the above‑mentioned documents. On this evidence, the learned counsel for the parties admitted that the damage to the goods in dispute was caused after they were discharged by s. s. "Fausta" into the lighter "Rapida" on 17th May, 1955. Thus the damage to these goods was caused by rain between 17th May, 1955 and 6th June, 1955. It is also in evidence that there were heavy rains on 17th May 1955, and it cannot be denied on this evidence that the damage to the goods in question was caused by rains while in the lighter "Rapida". Therefore, the finding of the learned Subordinate Judge that the damage was caused after the goods were landed on the jetty cannot be accepted on the evidence on the record ; besides, the goods were landed on the jetties by 6th June 1955, and the survey was held on 8th June 1955. There is nothing on the record to suggest that the shortage of the goods took place after they were landed on the jetties. In our opinion, on the evidence lad on the record, the only conclusion that can be reached is that the shortage of the goods took place at the time when they were on the lighter "Rapida." The possibility of the damage caused to the goods by saline water or loss in any other way is completely ruled out in the Survey Report which was admitted in evidence by consent of the parties. The learned counsel for the parties have, therefore, argued this appeal before us on the assumption that the damage to the goods in question was caused when they were on the lighter "Rapida". Mr. Naumani, the learned counsel for the appellants contended that the lighter "Rapida" belonged to the Agents of the respondents and, therefore, any damage caused to the goods in dispute on that lighter will be the responsibility of the respon dents. He argued that the goods being in the custody of the Agent of the respondents will be treated in their custody. He further argued that when the goods were on the lighter "Rapida", the position of the respondents was that of ordinary bailees. According to the learned counsel, the respondents' liability as bailees might have ended under the terms of the bill of lading, but their liability as bailees in other capacities continued. The learned counsel in support of this contention placed before us a Division Bench decision of the Dacca High Court in Abdur Rahman v: Mackinnon Mackenzie & Co. (P L D 1959 Dacca 961). In this decision it was held that at Common Law after the contract of afhreightment ends the common carrier incurs a new liability as an involuntary warehouseman or a bailee if the goods still continue to remain in his custody even by reason of some fault of the consignee, and he is bound to take such care of the goods as a prudent man would take of his own goods of the same kind, bulk or value in similar circumstances. This decision has no bearing on the fact of this case. In that case after the discharge of the cargo, it was stored in the warehouse of the steamship company while it was stored there, damage was caused to a consignment of old newspaper imported by the appellants. It was in those circumstances that the liability of the steamship company was considered to have been established as bailees under the rule of Common Law. In the present case, the position is entirely different. The goods in dispute at the time when damage was caused to them were not delivered at the port of destination and had not been ware housed. It is, therefore, perfectly clear that the respondent's responsibility as common carriers had not come to an end, and their liability, if any, shall have to be determined in that capacity, and not as involuntary bailees. In view of this, the Dacca case is distinguishable and the principles enunciated in it cannot be employed for the decision of this case. We will now consider the case of the respondents. The case put forward on their behalf is that their liability as ship-owners for the damage or loss caused to the appellants' goods were extinguished on the discharge of the goods from the tackle of the ship, on the following terms of the bill of lading:‑ "The Company is to be at liberty to carry the goods to their Port of Destination by the above, or any other steamer or steamers, ship or ships, motor vessel or vessels either belonging to the Company or to other persons, and to trans‑ship or land and store the goods either on shore or afloate and to reship and forward same at the Company's expense but at shipper's or consignee's risk: at the like risk to deviate as above mentioned. In all cases and under all circumstances the Company liability shall absolutely cease when the goods are free of the vessel's tackle and thereupon the goods shall be at the risk for all purposes and in every respect of shippers or consignee." Both the Courts below have accepted this contention and exonerated them of their liability under this term. Mr. Patel, who has been of very great assistance to us in this appeal, has referred us to a decision of the Privy Council in Chartered Bank of India, Australia and China v. British India Steam Navigation Company Limited ((1909) A C 369). In that case the Judicial Committee were considering a similar term in the bill of lading. It is urged before us that the ship-owners' liability should be taken to have been extinguished when the goods are found to have been properly discharged from the tackle of the ship. In that case the goods were on board the defendants' ship to be carried to Penang and delivered there to order or assigns under bills of lading which contained the condi tion that "in all cases and under all circumstances the liability of the Company shall absolutely cease when the goods are free of the ship's tackle, and thereupon the goods shall be at the risk for all purposes and in every respect of the shipper or consignee." They were delivered to Landing Agents appointed by the defendants, and for that purpose had been discharged froth tile ship's tackle into lighters sent by the said Agents, but by fraud, in which the said Landing Agents participated, never reached tile consignees. It was held by their Lordships that although there had been no delivery under the bills of lading, yet the provision as to cesser of the defendants' liability directly the goods were free of the ship's tack' was perfectly clear, and that it must be operative and effectual to protect them. In reply, Mr. Naumani, appellants' counsel has urged before us that the principles enunciated in this decision cannot be applied to the facts of this case. The learned counsel contended that the protective clause should be read in the context in which it is used and has no general application. He further argued that the above mentioned condition incorporated in the bill of lading offends against the rules laid down under the provisions of ‑the Carriage of Goods by Sea Act, 1925, and is ineffective. We will deal with these grounds separately. The first ground urged by the appellants' counsel is not without substance. It will be noticed that the protective clause is preceded by another clause under which the Shipping Company is authorised to carry the goods to the port of destination by their ship s. s. "Fausta" or any other steamer or steamers, ship or ships, motor vessel or vessels either belonging to the Company or to other persons, and to trans‑ship or land and store the goods either on shore or afloat and to reship and forward same at the Company's expense but at shipper's or consignee's risk: at the like risk to deviate as above mentioned. Then it is followed by the term which exonerates the Shipping Company from its liability. But unlike the clause before the Judicial Committee, in the clause under consideration the liability of the ship-owners absolutely ceased only when the goods are free of the vessel's tackle. It is, therefore, perfectly clear that the term in question is not the sane which was before the Judicial Committee in the abovementioned case. This is not a case of a bill of lading under which the responsibility of the Shipping Company shall cease to exist when the goods are free of the ship's tackle. On the contrary, it is a case where the Company's liability absolutely ceased when the goods are free of the vessel's tackle. The important term used in, this condition is the word "vessel". In our opinion, it is very wide and includes not only the ship "Fausta" but also any other steamer or steamers, ship or ships, motor vessel or vessels either belonging to the Company or to other persons used for the trans shipment of the goods or for landing it at the port of destination. The significance of this term, when read in the context in which it is used becomes very important. Had the intention of ship-owners been only to extinguish the liability of the ship "Fausta" there was no sense in using the word "vessel". It is, therefore, quite obvious that the lighter "Rapida", which was employed for the purpose of discharging the goods in dispute, is covered by the word "vessel" and the responsibility of the respondents continued under the above‑mentioned condition so long as the goods were not free from the tackle of this vessel. This aspect of the question was not considered by the subordinate Courts below. In our opinion, therefore, on the facts proved in this case the damage having been caused when the goods were on the lighter "Rapida" the liability of the Shipping Company did not cease to exist after the goods bad left the tackle of the ship "Fausta". It seems to us that the learned subordinate Courts were not presented with this important aspect of the case and have, therefore, fallen into an error. In this view of the matter it was not necessary for us to discuss the next ground, whether the above‑mentioned condition in the bill of lading is hit by the provisions of the Carriage of Goods by Sea Act, 1925. But since the learned counsel for the parties have addressed us at length on this point we will take this opportunity to express our opinion on it. It was urged by Mr. Naumani that under Article III, rule 8 of the above enact ment, it is not open to the ship-owners to relieve themselves from liability for loss or damage in respect of the duties and obliga tions provided in it. Article III, rule 8, is in the following terms :‑ "

8. Any clause, covenant or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to or in connection with goods arising. from negli gence, fault or failure in the duties and obligations provided in this Article or lessening such liability otherwise than as provi ded in these Rules, shall be null and void and of no effect. A benefit of insurance or similar clause shall be deemed to be a clause relieving the carrier from liability." The learned counsel further referred us to Article III, rule, 2, which lays down that "subject to the provisions of Article IV, the carrier shall properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried". His contention is that in view of these statutory rules the burden is on the ship-owners to establish that the condition relied upon is not hit by them. In other words the Shipping Company should establish that the condition under consideration is covered by the immuni ties granted to the ship-owners under Article IV or is in the nature of an agreement between the parties in respect of the goods carried by the ship subsequent to their discharge from it, provi ded in Article VII. The question of burden of proof need not detain us. It is now well established that if the ship-owners claim exemption from liability for the loss caused to the goods, the onus to prove exemption is on them. They must establish not only that the loss was caused on account of external circumstances but further establish that they are not liable to compensate for the loss under a valid agreement entered into between the parties. The respondents are not seeking protection under the immunities provided in Article IV of the above‑mentioned rules. Their case is that the condition under consideration of the bill of lading is subsequent to the stage of the discharge of the goods from the ship. Appellant's counsel's contention is that under the definition of "carriage of goods" in the Rules, it covers the period from the time when the goods are loaded on to the time when they are discharged. According to him, until the goods are landed from a lighter, the goods cannot be considered to have been discharged from the ship. The learned counsel for his contention has relied only on the definition and the Rules, but has not placed any decided cases before us to support it. Mr. Patel, respondents' counsel, in keeping with the traditions of the Bar, has referred us to two decisions which could help the appellants' case. In the first case, Goodwin Ferriera & Co. v. Lamport & Holt (141 L T R 494), Roche, J., after holding that if the sea transit had ended when the goods were placed in the lighter the defendants are protected by the terms of the bill of lading, observed as under :‑ "The discharge of these goods was part of the operations which are covered and affected by the Carriage of Goods by Sea Act, 1924. In my judgment the discharge of these goods was not finished when they were put into a lighter when other goods were being discharged into the same lighter to make up the lighter load which was to start for the shore. When it is contemplated that those goods are to form the lighter load with other goods the discharge of the goods themselves within the meaning of the Act of Parliament is, in my judgment, going on so long as other goods are being raised into the lighter and stowed into the lighter alongside or on top of them." In that case, certain goods were carried from Liverpool to Bahia, where they were discharged into a lighter. Certain other iron goods, packed in a wooden case, were being lowered into the same lighter when the case broke and the iron goods fell out into the lighter and holed it. Sea‑water entered and damaged the cotton goods. Under the contract of carriage lighterage was to be at the risk of the owners, but it was subject to the provisions of the Carriage of Goods by Sea Act, 1924. The owners of the cotton goods claimed damages front the ship-owners. The English Court did not exonerate the ship-owners on the basis of the exemption clause on the ground that, if the discharge into the lighters had not been complete and the damage was caused during the discharge of the goods, the ship-owners' liability had not come to an end. In the second case, Pyrene Co. v. Scindia Navigation Co. ((1954) 2 All E R 158) it was urged that the phrase in Article III, rule 2, that "the carrier shall properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried" did not affect the ship-owners' rights and immunities in respect of an accident occurring at the stage of the loading. But this contention was repelled, and Devlin, J. observed that the reference to "when the goods are loaded on" in Article I (e) of the Carriage of Goods by Sea Act, 1924 was not intended to specify a precise moment of time, but merely related to the first of a series of operations constituting the carriage of goods by sea and covered by the bill of lading, and it could not be said that the contract covered by the bill became operative when the tender passed the ship's rail, for the "loading" referred to in Article II, which was undertaken by the defendants, extended to the whole operation including that part of the operation taken place on the shore side of the ship's rail." The facts of that case are that a Shipping Company entered into a contract with the Government of India, by which they agreed to sell to the Indian Government a number of airfield crash tenders, F. O. B. London. In April 1951, the plaintiffs in accordance with the instructions issued by the Agents of the Government of India delivered one of the tenders to the Port of London for loading on board the ship. In the course of loading by the defendants' stevedores, but before it was across the ship's rail, the tender was dropped and damages through the fault of the ship. The plaintiffs had the tender repaired and claimed in tort the amount of the cost of the repair from the defendants. The Shipping Company admitted the liability but contended that the amount of their liability was limited under the Hague Rules. Thus, it was a converse case in which the protection was sought by the Shipping Company under the provisions of the Carriage of Goods by Sea Act, 1924. Devlin, J. observed as under:‑ "The phrase shall properly and carefully load' may mean that the carrier shall load and that he shall do it properly and carefully, or that he shall do whatever loading he does properly and carefully. The former interpretation, perhaps, fits the language more closely, but the latter may be more consistent with the object of the rules. Their object as it is put, I think, correctly in CARVER'S CARRIAGE OF GOODS BY SEA, 9th Ed., p. 186, is to define, not the scope of the contract service, but the terms on which that service is to be performed. The extent to which the carrier has to undertake the loading of the vessel may depend not only on different systems of law but on the custom and practice of the port and the nature of the cargo. It is difficult to believe that the rules were intended to impose a universal rigidity in this respect, onto deny freedom of contract to the carrier.'' The carrier is practically bound to play some part in the loading and discharging, so that both operations are naturally included in those covered by the contract of carriage.. But I see no reason why the rules should not leave the parties free to determine by their own contract the part which each has to play. On this view, the whole contract of carriage is subject to the rules, but the extent to which loading and discharge are brought within the carrier's obligations is left to the parties themselves to decide." The learned Judge further observed: "I reject the interpretation of loading in Article II as covering only the second stage of the operation. Such authority as there is against it. If loading under the rules does not begin before the ship's rail, by parity of reasoning discharging should end at the ship's rail ; but so to hold would be contrary to the decision of Roche, J., in Goodwin, Ferreira & Co., Ltd., v. Lamport & Holt, Ltd.". It would thus be noticed that in these two English decisions the view that loading does not begin before the ship's rail or discharging should end at the ship's rail was not accepted. In our opinion, these decisions are not helpful to the appellants' case. Delvin, J's remarks that the responsibility of the carrier in such cases must depend not only upon different systems of law, but upon the custom and practice of the Port and the nature of the cargo, and under the Carriage of Goods by Sea Act Rules the parties are free to determine by their own contract the part which each has to play are very significant observations. Besides, in none of the above‑mentioned cases, the Shipping Company claimed any protection under a clause of the nature which is under consideration before us. There fore, the principles enunciated in these cases are applicable only to those cases where is no special agreement between the parties in respect of the loading and discharging of the goods. In our opinion the view of the Privy Council in the case of Chartered Bank of India, Australia and China v. British India Steam Navigation Co. Ltd. that parties are perfectly free to make any stipulation they please unembarrassed by any implied condition or any original underlying obligation, if such stipula tion is not in conflict with the rules and the Carriage of Goods by Sea Act, still holds good. In this case the Judicial Committee considered an identical clause as operative and effectual and held that it affords complete protection to the Shipping Company. In our view, such protection clause being in the nature of an agreement subsequent to the discharge of goods from the ship will neither offend Article III, rule 8, nor Article VII. The question of proper discharge or loading of the goods depends on the terms of the contract and no hard and fast rule can be laid down in this respect. Under Article VII it is clearly laid down that the provisions of the Carriage of Goods by Sea Act, 1925, do not prevent a carrier or a shipper from entering into any agreement, stipulation, condition, reservation or exemption as to the responsibility and liability of the carrier or the ship for the loss or damage to or in connection with the custody and care and handling of goods prior to the loading on and subsequent to the discharge from the ship on which the goods are carried by sea. The most important term in this Article is the word "the ship". It is, therefore, open to the parties to stipulate the stage from which the responsibility of the Shipping Company shall cease to exist after the goods are free from the tackle of the ship or otherwise. In the present case, however, the position is different and the view accepted by the subordinate Courts cannot be of any assistance to the case of the respondents. The clause with which we are dealing contains the term, "the vessel", which has a wider scope and meaning and, as already discussed, cannot exonerate the respondents from their liability for the loss or damage caused to the goods of the appellants. Lastly, it was urged by Mr. Patel, the learned counsel for the respondent, that the appellants have failed to prove the damages caused to the goods in question. The argument of their learned counsel that there was no evidence about the extent of the damage caused to the goods or about the market price of the goods alleged to have been lost, has not impressed us. So far as the extent of the damage caused to the goods is concerned, this is conclusively proved by the survey report (Exh. 3). This document was admitted by the consent of the parties. The survey report is by the Agents of the respon dents. Mr. Patel's contention that the gentleman who conducted the survey should have been summoned as a witness because under the Evidence Act it was necessary that the report of an expert should be proved by him, has no substance. In our opinion, the survey report is not the opinion of an expert, but of the condition of the goods in which they were found at the time of the survey by a person who is conversant with the commodities about which the survey was made. There is also no force in the contention of the respondents' counsel that there is no evidence about the market price of the goods, on the record. The appellants examined Habib (P. W. 1) in support of their case. This witness on oath stated that the market rate of the goods in question was Rs. 26/8. The respondents did not cross‑examine this witness on this point. The respondents did not even examine any witness in rebuttal on oath to prove that the statement of P. W. Habib that the market rate of the goods was Rs. 26/8 was not correct. In these circumstances we are satisfied that the appellants' evidence both about the extent of damage and the quantum of damages is satisfactory and should have accepted. as sufficient in proof of their case. Having regard to the above‑mentioned evidence, we are satisfied that the appellants' evidence has fully established their claim about the damage caused to the goods. Accordingly we allow the appeal. In the result, the judgment and decree of the Subordinate Court is reversed and the appellants' claim is decreed in the sum of Rs. 2,820‑12‑0 with costs throughout. K. B. A. Appeal accepted.