P L D 1960 (W (PLP)

Issue No. 1.‑This issue was given up. Issues Nos. 2 & 3.‑These are the most important issues in these cases. The plaintiffs have taken up two `alternative positions. Firstly, that before the cargo was shipped the defen dant companies assured them that the amounts paid as lighterage and demurrage charges will be refunded to them. Secondly, that the amount was refundable as it was charged for a specific purpose and the defendant companies having not used it for that purpose were bound to refund it. So far as the first point is concerned, Messrs Dada Limited examined their Assistant Manager P. W. 2 Kassim (Exh. 7) to prove it. I am not inclined to give any weight to his statement as both Mr. A. D. Minocher Dinshaw (Exh. 10) and Mr. Kassim Dada (Exh. 12) have denied this allegation on oath. Moreover, he is not supported by Abdul Ghani (Exh. 8), who, according to him, was present when he discussed this question with Mr. A. D. Minocher Dinshaw. P. W. Abdul Ghani expressed ignorance about. After careful consideration of the evidence and other facts in the case, I will hold that no such talk took place and the defendant com panies gave no such assurance and decide this point against Dada Limited. Now the plaintiffs' alternative case is based on two grounds. In the first place they contend that some of the defendant companies have been taking these amounts in advance as lighterage and demurrage charges and used to refund it when not used for that purpose. In the second place they contend that the defendant companies raised the freight for commercial cargo from Rs. 46 to Rs. 61 per ton in 1952 and continued to charge Rs. 20 per freight ton for lighterage and demurrage charges. The shippers considered lighterage and demurrage charges as unreason able and complained to the Ministry of Commerce. The question was discussed between the representatives of all the interested parties and the Shipping Controller by notice Exh, 6/2 notified that the shipping companies had agreed to charge Rs. 61 per ton as freight for commercial cargo and Rs. 10 per frieght ton as lighte rage charges provided they are released within 48 hours and Rs. 20 per freight ton if not released within the said period. After this announcement all the Steamship Companies in pursuance of notice Exh. 7/2 started charging Rs. 20 r.‑,, :eight ton as lighterage charges. They argued that to terms of the agreement incor porated in the notice the amounts are specifically given for lighterage charges and are refundable if not used for that purpose. This case is stoutly opposed by the defendant Steamship Companies. They have taken up the position that the notice Exh. 7/2 is not binding on them, that the amount in dispute was an outright payment and is not refundable as there is no such stipulation between the parties. In support of their pleas they have relied on the circumstance that Muhammadi Steamship Co. bad included the amount in dispute under the item freight in the Bill of Lading ; that in some cases the plaintiff paid the amounts after the cargo had been shipped and discharged and that it was not taken as an advance or deposit and was charged in lump sum to compensate the defendant companies to meet the expenses of detention of the vessel at the outer anchorage due to congestion at Chittagong Port. They also placed reliance on a decision of Kaikaus, J. reported in Muhammadi Steamship Co., Ltd. v. Abdul Aziz Ali Muhammad (P L D 1959 Kar. 269) which upheld their contention in respect of a similar dispute. It was pressed that this decision was binding on me. After bearing the learned counsel for the parties and on consideration of the evidence in these cases, I am of the view that the plaintiffs suit must succeed. Mr. A. H. Faruqui, the senior defence counsel admitted that even prior to the Shipping Con troller's notice Exh. 6/2, the defendant companies charged at the rate of Rs. 20 per freight ton in pursuance of clause (10) of Bill of Lading (Trans Oceanic). At the time if no lighterage was used and demurrage incurred, the amount was refundable. In case part was utilised, balance was refundable. If more expenses were incurred, it was recovered from the shippers and the ship‑owners could detain the goods. But he contended that on past experience later on the ship‑owners decided that a lump sum amount should be charged as an outright payment in the shape of lighterage and demurrage charges as part of the freight, on the understanding that it will not be refundable even though no lighters were used or demurrage incurred. According to him, that was an independent arrangement and had nothing to do with the Shipping Controller. It was not and could not be affected by notice Exh. 6/2. He strongly urged that in any case the onus of the issues that the amount was refundable is on the plaintiffs, who should satisfactorily discharge it without taking advantage of any weakness in the defendants' case. In order to appreciate the contention of the parties it must be borne in mind that freight and demurrage are two separate concepts in mercantile law. Generally speaking freight is the remuneration payable for the carriage of the goods in a ship and is payable on arrival of the goods ready to be delivered to the consignee in a merchantable condition. If agreed upon it is also paid in advance on shipment. Demurrage on the other hand is a charge for delay in clearing goods at the destination by the consignee. It is, therefore, usual in charter parties and some time in Bill of Lading to fix time within which the ship is to be loaded and discharged. The charterer frequently is also allowed additional days upto a certain number for this purpose provided he agrees to pay for it at a specified rate. This payment is called demurrage. According to Carver's on "Carriage of Goods by Sea" this word is also commonly used to denote damages which become due to the ship owner for the detention of the ship, in breach of the charter party or Bill of Lading. There is a little misconception about the responsibility of the shippers in respect of the damages caused by the detention. It is now well settled that in the absence of any specific term in the Bill of Lading about it, the duty of the shipper, or his consignee or assign is to be reasonably diligent in the discharging and receiving the goods at the port of destination, what is reasonable time depends either on the custom of the port or on the facts of a particular case. This view is supported by a decision of the Court of Appeal in Foster v Knoop ((1874) 4 Q B D 299). Bearing in mind these principles I will proceed to discuss the contention raised before me. I have already observed that Mr. Faruqi admitted before me that till the year 1951, the Shipping Companies used to take Rs. 20 per freight ton as lighterage and demurrage charges as advance and it was refundable if not used for this purpose. This practice was however in vogue even in January 1952. United Oriental‑ Steamship Co. under receipt Exh. 8/1 dated 12‑1‑52, which reads as under "Received from Messrs Adam Limited c/o New Challi, Karachi, the sum of Rs. 1,065 (Rupees one thousand and sixtyfive only) as deposit towards lighterage charges on their cargo shipped per S. S. "Alma" for Chalna. Lighterage realised will be adjusted from this deposit and the balance will be adjusted." . . . . . . . (sic) received this amount as deposit and stated in clear terms that lighterage realised will be adjusted from this deposit. There is no clear evidence what happened between January 1952 and May 1952, The plaintiffs' case is that after notice Exh. 6/2 the Steamship Companies continued to charge this amount in pursuance of the agreement arrived at the meeting held on 14‑5‑1952 between the shippers, ship‑owners and the official of the Ministry of Commerce. The defendants' case is that they, on the basis of past experience, decided to charge a lump sum amount for this purpose, which was not refundable. The plaintiffs' case is supported both by documentary and oral evidence. In this connection the most important documents are Exh. 6/I and Exh. 6/2. The minutes of the meeting held on 14‑5‑52 gives a clue to the disputes between the parties and also gives an idea for what purpose Rs. 20 was charged by the Shipping Companies from the shippers. The shippers made a complaint that the shipping companies charges at Rs. 20 per freight ton for lighterage was unreasonabie as they were engaging lighters at cheaper rates for discharging the cargo at the outer anchorage. The minutes show that in this meeting Mr. Cowasjee acted as the spokesman of the steamship companies who met the shippers' complaint in the following words : "Mr. Cowasjee stated that the rate was based on the cost of maintenance of the travellers and it was not possible for him to make any reduction in the rate. The shippers were given the option of making their own lighterage arrangements, and if they could get cheaper rates from the contractors at Chittagong, they were welcome to employ them but in that case demurrage would be payable by the shippers if lighterage operations were unduly delayed owing to low rate of un loading." The chairman promised to look into the matter and later on announced by public notice that the shipping companies had agreed to charge Rs. 10 per freight ton for lighterage at the outer anchorage if the lighters are released within 48 hours and at Rs. 20 per ton if lighters are not released within that period. The position taken up by Mr. Cowasjee leaves no doubt in my mind that Rs. 20 was charged for using lighters and for no other purpose. He threatened to charge demurrage only if lighte rage operations were unduly delayed owing to low rate of unloading. This attitude was consistent to the normal practice adopted by all the shipping companies at the Port of destination. The defendant companies examined Mr. Kassim Dada and Mr. A. Minochar Dinshaw, Resident Director and Director of Muhammadi Steamship and Trans Oceanic Company respectively but both of them pleaded ignorance about the contents of the notice Exh. 6/2 published in "Dawn". It may be that Mr. Dinshaw was not in Pakistan at the relevant time, but his statement about the representatives who attended the said meeting on behalf of his company was evasive and left a bad impression on my mind. Although Mr. Kassim Dada admitted that Mr. David Boyd and Mr. K. A. Moid, who attended the said meeting are the representatives of his company but he also pleaded ignorance about the contents of the notice Exh. 6/2. The admission of this witness that freight charges were raised from Rs. 46 to Rs. 61 partly to cover the expenses incurred during the waiting time at the outer anchorage and the ship‑owners must have agreed to what is mentioned in Exh. 6/2 clearly demonstrates that the announcement in Exh. 6/2 was the result of agreement between the Controller of Shipping and the ship- owners pursuant to the minutes recorded in Exh. 6/1. This witness, however, made an attempt to explain Exh. 6/2 by pointing out that the notice contains no mention about demurrage. That may be so but it does not prove the alleged arrangement between the shippers. The admission of D. W. 4, Kassim (Exh. 13) and D. W. 2 Abdul Kadir (Exh. 11) that their com panies started charging lighterage and demurrage after Exh. 6; 2 and made no protest and charged freight according to the public notice and complied with its terms further supports the plaintiff's case that the amount of Rs. 20 was charged for using the lighters. It was hotly contested on behalf of the defendant that they were not bound by Exh. 6/2 as it was not issued under any law. But the notice does not claim that it was issued under. any provisions of law. It only announced the agreement of the ship-owners. There is no evidence that the defendant companies made any protest against it. They have also adduced no evidence to show that the alleged agreement was not entered into with them. Defendants' failure to produce important witnesses who participated in the meeting raises a strong pre sumption in favour of the plaintiffs that the terms of Exh. 6/2 are the result of agreement of all the interested parties. In my opinion, this is a very strong piece of evidence which gives full support to the plaintiffs' case, and cannot be lightly ignored. The defendant's counsel's argument that the alleged agreement does not deal with the question of demurrage has also no force. The admission of Mr. Cowasjee before the Shipping Controller throws abundant light on the circumstances under which the defendant companies claim demurrage from the shippers. The Controller of Shipping solved this difficulty by fixing two separate rates viz. Rs. 10 and Rs.

20. In my opinion it was in that sense, that the word "demurrage" was used along with lighterage in the bill of lading and receipt. There the words are used in conjunction and supports the plaintiffs' case that demurrage was to be charged in respect of and connected with the use of lighters. This is the only result on which I can arrive in the absence of any positive and clear evidence from the defendant's side. The circumstances relied upon by them cannot nullify the effect of the agreement notified in Exh. 6/2. The circumstantial evidence in this case also supports the plaintiffs' case. It was admitted by D. W. 4 Kasim (Exh. 13), that Messrs Mackinnon Mackenzie were charging Rs. 22 per ton as freight for similar cargo because. they had special privileges and facilities provided in the berthing of their ships. There is not the slightest doubt that for this reason the Ministry of Commerce agreed to raise the freight from Rs. 46 to Rs. 61 per ton so that the defendant companies may meet the expenses incurred by them for the detention of their ships at the outer anchorage. This fact was reluctantly admitted by D. W. Kassim Dada of Muhammadi Steamship Co., and I am of the view that the further charge of Rs. 20 was not for this purpose. It was only to cover demurrage charges payable to the Port Trust Authorities, who burdened the ship‑owners if they stayed at the outer anchorage beyond the time allowed by them. Then we have the evidence of D. W. Abdul Sattar (Exh. 16) that the United Oriental Steamship Company refunded some portion of the amount to Dada Limited and Adam to oblige them. This also supports the plaintiffs' case. Now I will consider the decision of Kaikaus, J. reported in Messrs Mohammadi Steamship Co. Ltd. v. Messrs A. A. Muhammad (P L D 1959 Kar. 269). In that case my brother was considering certain revision petitions filed against the judgment of the Chief Judge; Small Causes Court in respect of similar dispute. The facts of those cases are distinguishable as the shippers led no evidence in proof of their allegation that the amount an dispute was refundable. The onus being on the shippers, Kaikaus, J. had to resort to a negative approach. He considered a number of circumstances and came to the conclusion that their cumulative effect was to negative the plaintiffs contention. But in these cases the plaintiffs have led important evidence to show the circumstances in which Exh. 6/2 was issued and about its evidentiary value. I will; however, consider their effect on the plaintiffs' case as put and proved before mv. Kaikaus, J. was influenced by the following circumstances in rejecting the plaintiffs' plea (1) That the onus was on the plaintiffs, who failed to discharge it as they led no evidence in support of it. (2) That receipts issued by the shipping companies are not of deposit of amounts. No explanation why the word "Deposit" does not appear there. (3) In the case of Muhammadi Steamship Co. the amount prepared, includes the charges for lighterage and demurrage is described as freight. It too does not mention that the amount was paid as a deposit. (4) The shipping order affords stronger evidence that the amount in question will be levied and which showed that it was not refundable. (5) The conduct of the shipping companies in waiting for berth accommodation at outer anchorage and not using the lighters for discharging the cargo was inexplicable unless the contract with the shippers was to pay lump sum amount. (6) No explanation why fn some cases payment was made after the ship had left Karachi and in one case after the ship had left Chittagong. The fact of payment at a later date is more consistent with the case put forward by the shipping companies. (7) The fact that shipping companies were charging uniform rates also supports that case. (8) The words "lighterage and demurrage" do refer to expenses but the amount could very well be paid as a lump sum for meeting such expenses. Therefore there could very well be an agreement that a lump sum amount will be paid and it was left to the shipowners whether they use lighters or incur expenses by standing on the outer anchorage. (9) Demurrage not only means what. is paid to the Port . Trust Authorities but also includes detention charges ,paid by the shippers. (10) That the fixing of rates by the shipping companies was not under any statutory provisions. The circumstance relied upon by my brother in support of the view expressed has received my anxious consideration. In all probability I might have arrived at the same conclusion as Kaikaus, J. did, but the circumstances relied upon by him are sufficiently rebutted by the positive evidence led before me. Besides other evidence it is proved that prior to the arrangement Exh. 6/2, the amount of Rs. 20 was taken as a deposit by United Oriental Steamship Co. and out of this amount some portion was actually refueded to Messrs Dada Limited and Adam Ltd. The defendant company took up the definite position that on past experience they jointly decided to charge a lump sum amount as lighterage and demurrage which was not refundable. But there is no evidence on that point. On the contrary some of the defendant's witnesses reluctantly admitted that the amount of Rs. 20 was charged in pursuance of Exh. 6/2. It appears to me that all the circumstances relied upon by Kaikaus, J. in view of the documentary evidence Exhs. 6/1 and 6/2 have lost their significance. Mr. Nasiruddin, the learned counsel for Muhammadi Steamship Co., distinguished his case on the ground that in their case the amount of lighterage and demurage was charged as freight and on the terms of the Bill of Lading it was not refundable. A perusal of the Bill of Lading will show that the amount was separately charged as lighterage and demurrage charges. The mere fact that the freight and these charges were totalled together and the total was stamped as "Prepaid Freight" will not convert this payment as freight. There is ample evidence to explain the amount paid under the Bill; of Lading. I attach no importance to this fact. I have already discussed what is meant by freight and in the absence of any term in the Bill of Lading that the other charges are not refundable, I am not inclined to accept the view that it was paid towards freight. In my opinion, the case of Muhammadi Steamship Co. stands on the same footing as of other companies. It was urged by the learned counsel that their ship had to incur daily expenses of Rs. 3,000 towards maintenance, and for this reason the amount of Rs. 20 charged for lighterage and demurrage is not refund able. In that connection he referred me to Exh. 13/53, Exh. 13/54 and Exh. 13/55. But these statements of account do not show the detention charges. There is no evidence in any of the cases that the ships stayed at the outer anchorage beyond the time fixed by the Port Trust Authorities and they incurred demurrage on that account. In the absence of such evidence this contention has no force and must be rejected. There is a minor dispute between Messrs Haji Sattar‑Haji Muhammad and Messrs United Oriental Steamship Co. in respect of the amount claimed in Suit No. 921 of 1953. The shippers have claimed the refund of Rs. 3,800 paid as lighterage and demurrage, charges. The defendant company in evidence (vide statement of D. W. 5 Abdul Sattar (Exh. 16) ) admitted that Rs. 4,023 was charged for that purpose. This being the position the defendant company can possibly have no grievance as the plaintiffs are demanding much less amount. I am, therefore, satisfied that the plaintiffs have claimed much less and they are entitled to its refund like other plaintiffs. To sum up my conclusions on the evidence led by the parties are as under (1) That the amount of Rs. 20 was charged in the past as lighterage and demurrage and was refundable. (2) That the propriety of charging this amount was again considered in the meeting held at the Ministry of Commerce on 14‑5‑1952 and with the agreement of all the interested parties was allowed to be continued as provided in Exh. 6/2. (3) That thereafter the amount of Rs. 20 was charged as lighterage and demurrage in pursuance of arrangement notified in Exh. 6/2. (4) That there is no independent arrangement between the defendant companies whereby it was agreed that the amount would be charged as a lump sum amount and was not refundable. (5) That ordinarily the shipping companies are entitled to the detention charges if the shippers are not reasonably diligent in discharging and receiving the goods according to the practice at Port. (6) That the defendant companies have failed to prove the detention of the ship or any negligence on the part of the plaintiffs. (7) That the circumstances relied upon by Kaikaus, J. in P L D 1959 Kar. 269 with utmost respect cannot hold good in the face of reliable evidence led by the plaintiffs in the cases under consideration. (8) That the defendant did' not use the amount for the purpose and object for which it was paid under the ordinary law it is refundable to the plaintiffs. For the reasons given above, 1 will decree the claim in all the suits against the defendants with costs. A.H. Suits decreed.