P L D 1967 Dacca 159 (PLP)

MURSHED, C. J.‑Defendant Karachi Steam Navigation Com pany, Ltd., (hereinafter called defendant) entered into a contract with Messrs Abdul Rahman Abdul Gani (plaintiff) for carrying by sea from Karachi to Chittagong, by a vessel belonging to the former, some drums of rapeseed oil, cottonseed oil and certain quantity of rapeseeds covered by a member of Bills of Lading. It is plaintiff's case that the aforesaid goods were short delivered by defendant. They, therefore, sued defendant for compensation in respect of such short delivery. A sum of Rs. 29,000 was claimed by way of compensation. Defendant traversed the allegations made by plaintiff in support of the claim for compensation. One of the material defence was that, in any event, the assessment of compensation or damage must be made in accordance with clause 9 of the Bill of Lading which fixed the maximum amount of liability per package or unit to be Rs.

250. On assessment of evidence and the points involved in the suit, the learned Subordinate Judge, who tried the suit, awarded a part decree in favour of plaintiff in the judgment delivered by him. Against the aforesaid judgment and decree, defendant preferred an appeal which came up for peremptory hearing before a Division Bench of this Court. When the appeal was being heard a question arose, whether the aforesaid clause 9 of the Bill of Lading was hit by the provisions of the Carriage of Goods by Sea Act, 1925 (Act XXVI of 1925). On an identical point the decision of a Division Bench of this Court in the case of Messrs Abdul Rahman Abdul Gani v. Messrs Karachi Steam Navigation Co. Ltd. (P L D 1959 Dacca 536), was in conflict with another decision in the case of Messrs Karachi Steam Navigation Co. Ltd. v. Abdul Sattar Brothers (Nagaria) (unreported decision in F. A. 80 of 1954 dated the 28th of May 1958). In the latter case, Akbar J., in delivering the judgment, referred to rule 5 of Article IV of the Carriage of Goods by Sea Act, 1925, and observed thus: "The above section does not forbid the contracting party to limit his liability to a sum below

100. Hence it cannot be said that clause 9, being contrary to law, is not enforceable. The plaintiff did not declare the value of his goods and thus paid freight at a lower rate. He now cannot be heard to say that he is not bound by this clause

9. Hence we hold that in accordance with the provisions of clause 9 of the Bills of Lading he is entitled to get Rs. 250 only per package." It may be noted that clause 9, as referred to above, is identical to clause 9 in the Bills of Lading relating to the present case. The Division Bench before which this appeal was pending, therefore, referred the point to a Full Bench. The question, which has been referred to us, has been stated thus: "Whether in view of the provisions of Rule 8 of Article III of the Carriage of Goods by Sea Act, 1925, clause 9 of the Bills of Lading in question, could be regarded as null and void?" The point involved in this reference is a simple one and has been decided by the Supreme Court of Pakistan in the case of Messrs Karachi Steam Navigation Co. Ltd. v. Messrs Abdul Rahman Abdul Gani (P L D 1962 S C 90). It has been somewhat faintly argued before us that the Carriage of Goods by Sea Act, 1925, has not been made applica ble in the present case by the relevant Bills of Lading. Section 4 of the Carriage of Goods by Sea Act, 1925, makes it obligatory that the Bill of Lading shall contain a statement to the effect that its provisions will have effect subject to this Act. It is interesting to note that the Bills of Lading, which govern this case, incorporate such a clause which reads thus: "All the terms, provisions and conditions of the Indian Carriage of Goods by Sea Act, 1935, and the Schedule thereto all to apply to the contract contained in this Bill of Lading, and the Company are to be entitled to the benefit of privileges, right and immunities contained in such act, and the Schedule thereto as if the same were herein specifically set out. If anything herein contained be inconsistent with the said, pro visions it shall to the extent of such inconsistency and no further be null and void. 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 governed by the conditions and exceptions of this Bill of Lading." Inasmuch as the above clause refers to Indian Carriage of Goods by Sea Act, 1935, it is contended that there is no reference to the Carriage of Goods by Sea Act, 1925, which is the material law in Pakistan. We may point out that the year "1935" is simply a clerical error and that it should be read as "1925", because there is no such statute as Indian Carriage of Goods by Sea Act, 1935. The Indian statute is known as the Indian Carriage of Goods by Sea Act, 1925. `1935' is obviously an error which should be read as 1925. By adaptation, the said Act would, in Pakistan, mean the Carriage of Goods by Sea Act, 1925. For the purpose of adaptation in Pakistan the requirement is to drop the word "Indian" from the description of the statute. This point has, therefore, no substance. The provisions of the Act which are material to the disposal of this reference are rule 8 of Article III and rule 5 of Article 1V of the Schedule appended to the said Act. Rule 8 of Article III reads thus: "

8. Any clause, covenant or agreement in a contract or 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 provided 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." And rule 5 of Article IV runs thus: "

5. Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with goods in an amount exceeding 100 per package or unit, or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the Bill of Lading. This declaration if embodied in the Bill of Lading shall be prima facie evidence; but shall not be binding or conclusive on the carrier. By agreement between the carrier, master or agent or the carrier and the shipper another maximum amount than that mentioned in this paragraph may be fixed,' provided that such maximum shall not be less than the figure above named. Neither the carrier nor the ship shall be responsible in any event for loss or damage to or in connection with goods if the nature or value thereof has been knowingly mis‑stated by the shipper in the Bill of Lading." Reading the aforesaid rules together, it is clear that a clause in a Bill of Lading, relating. to assessment of carrier's liability during transit of goods under the said Act, would be void and 9 inoperative if it militates against rule 5 of Article IV or, for the matter of that, against any other provision in the Act. Having regard to the provisions of sub‑paragraph 3 of rule 5 of Article IV, there can be no manner of doubt that, under the said sub‑paragraph of rule 5 of Article IV, when the maximum liability of the carrier in fixed by an agreement between the parties, it must be subject to a minimum of 100, namely, the maximum amount specified in the first part of the paragraph. There is no ambiguity in the provisions of rule 5 of Article IV. The first sub‑paragraph provides that, if the shipper does not specify the value of the goods per package or unit, then the liability of the carrier is subject to a maximum of

100. The second subparagraph states that, if a declaration of a specified value is made, as referred to in the first sub‑paragraph, it would be prima facie evidence as to the value of the goods but such valuation would not bind the carrier who may prove that the goods, in fact, were of lesser value. The third sub paragraph requires that if a maximum liability per package or unit, as mentioned in the first sub‑paragraph, is fixed by parties to the contract, such liability cannot be less than the maximum amount specified in the sub‑paragraph, namely,

100. That is to say, it provides that the minimum assessment of such liability must be the maximum stated above. The last and fourth sub paragraph makes the provisions of the paragraph inapplicable in case of fraud, as stated in the said sub‑paragraph, perpetrated by a shipper. Therefore, the answer to the question referred to us must be in the affirmative, namely, that in view of the provisions of Rule 8 of Article III of the Carriage of Goods by Sea Act, 1925 read with Rule 5 of Article IV, clause 9 of the Bill of Lading in question must be held to be null add void as it seeks to limit the liability of the carrier to less than (00 per package or unit. Clause 9 of the Bill of Lading comes within the mischief of the third sub‑paragraph of rule 5 of Article IV, which specifically requires that when the maximum liability of the carrier is fixed under the said rule, the minimum rate per package or unit must be 100, which is the figure representing maximum liability under the first sub‑paragraph. In other words, whenever a maximum liability is assessed by parties, the assessment cannot be less than 100 per package or unit. This is also the ratio decidendi of the decision of the Supreme Court of Pakistan in the case of Messrs Karachi Steam Navigation Co. Ltd. v. Messrs Abdul Rahman Abdul Gani. It must be held that the case reported in 11 D L R 483 was correctly decided and that the unreported decision in F. A. 80 of 1954, dated the 28th of May 1958, stands overruled. The latter decision overlooks the requirement of the third sub paragraph of rule 5 of Article IV. The case reported in (1938) 1 K B 459 and similar decisions are inapplicable to the present case because of a vital difference in the relevant provision of law. Since the point was mooted before us, we may add that the operation of the Carriage of Goods by Sea Act, 1925, in this behalf, would commence from the time when the goods are loaded on the ship and would continue till their discharge from the said vessel at the destined port. This is clear from the, definition of "carriage of goods" in Article 1 (e) of the Rules in the said Act. Where the carrier can show that the goods suffered damage after they were discharged from the ship at the port of their destination, the quantum of damage would not be governed by the Carriage of Goods by Sea Act and, any stipulation, if made between the parties, unless it militates against other provisions of law, would, in the said circumstances, govern the case. We are not, however, confronted with such a situation in the present case. In this connection, we may quote Article VII of the Schedule to the Carriage of Goods by Sea Act, 1925; which reads thus: "Nothing herein contained shall prevent a carrier or a shipper from entering into any agreement, stipulation, condi tion, reservation or exemption as to the responsibility and liabi lity 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." Having answered the question referred to us, the appeal may now be disposed of by a Bench competent to hear it. SATTAR J.‑I agree. SALAHUDDIN AHMED, J.‑I agree. S. Q. Reference answered in the affirmative.