P L D 1974 Karachi 321 (PLP)

(3) Whether the consignment in suit was shipped in good order and condition? If not what is its effect? (4) Whether the consignment in suit or part thereof was discharged by defendant No.2. in damaged condition? If so, what was the extent of damage? 5) Whether the loss if any does not come within the scope of Insurance Policy and was it not due to a peril insured against? (6) Whether the plaintiff committed breach of the conditions and warranties of the Insurance Policy? If so, what is ifs effect? (7) Whether the plaintiff failed to properly preserve and exercise their rights of recovery in respect of loss against defendant No. 2 and/or the K. P. T.? If so, what is its effect ? (8) Whether the plaintiff has prejudiced the defendant No. 1's right of recovery against defendant No. 2 and/or K. P. T.? If so what is its effect ? (9) Whether the plaintiff has suffered any loss and if so to what extent? and which of the defendant is liable for loss and in what sum? (10) Whether the Survey Report is not binding on the defendants? (11) Whether any notice of survey and loss was given to the defendant No. 2, if not what is its effect? (12) Whether the suit is bad for non joinder of parties? If so what is the effect? (13) Whether the suit is barred by limitation? (14) Whether this Honourable Court has no jurisdiction to try the suit? (15) What should the decree be?

5. The parties have exhibited the necessary documents namely the bill of lading, the Insurance Policy with its accompaniments, the correspondence, the National Surveyors Marine Survey Report, the Invoice and the Claim Bill of the plaintiff. Plaintiff Farooque Umer has then examined himself and his witness Muhammad Ajmal Khan Officer in Habib Bank, Imtiaz Khan clerk of the Brokers of Karachi Stock‑Exchange, Usman broker of Dada Stock‑Excbange dealings in Bonus Vouchers, Mr. Ghafoor Qureshi, Proprietor of National Surveyors and Imambux Kazi Enquiry Officer of the K. P. T. producing the outturn report of s. s. Bombay Maru dated 14th July 1967. The defendant No. 1 has not led any oral evidence while defendant No. 2 Shipping Company have examined Director of their agents in Karachi Messrs Hegge & Company (Pakistan) Ltd.

6. For the sake of convenience, it would be better to examine the claim of the plaintiff against the Insurance Company defendant No.1. and the carriers defendant No. 2 separately to see how far each of the defendants is liable for this claim. The basic facts are undisputed. Messrs National Security Insurance Company Limited had issued policy No. KB/M‑10596/67 dated 5‑7‑1967 at Karachi in the name of Messrs Yasmeen Plastic Industries, Karachi, for an amount of Rs. 1,99,250 in respect of the cargo of 1086 bags plastic moulding compound per s. s. "Bombay Maru" from Kobe, Japan to Karachi. The Policy included the risk of, theft, pilferage, non‑delivery, tearing and bursting of bags, war, strikes, riots and civil commotions as Institute, theft, pilferage and non‑delivery clauses, strikes, riots and civil com motion clauses, Institute War Clauses and Institute Cargo clauses F. P. A. were attached to it. The risk of tearing and bursting of bags is thus included under the policy and this has been typed on the printed form of the policy. Under the policy the risk has been covered from warehouse to warehouse and the risk commenced when the goods left the warehouse in Japan and terminated when the goods reached the destination or the warehouse in Karachi, or until expiry of 60 days from discharge of the cargo. The Insurance Company had appointed the surveyors at the request of the plaintiff who was informed by the Clearing Agents about the damage caused by bursting of the paper bags. The goods were surveyed at K. P. T. Shed and also after their removal at the godown of the plaintiff. The survey report is accordingly binding on the Insurance Company and no evidence has been led by the Insurance Company to the contrary. There is also no dispute regarding the compensation claimed for this shortage in the contents as per report of the surveyor and the invoice of the goods.

7. Mr. Kazmi on behalf of defendant No. 1 Insurance Company, has presumably given up the pleas raised in the written statement and confined himself to the legal plea that since the plaintiff had not taken pains to pre serve his right to sue the carriers, he had committed breach of the general condition No. 7 printed on the reverse of the policy, and Insurance Company had thus been released from all liability under the policy. It has been pointed out by Mr. Kazmi that under Article 3, rule 6 of the Schedule to Carriage of Goods by Sea Act, notice of loss or damage had to be given in writing by consignee to the carrier or his agent at the Port of discharge before or at the time of the removal of goods, if the loss or damage was apparent. That otherwise such removal shall be prima facie evidence of the delivery by the carrier of the goods. Condition No. 7 on the reverse of the policy of Insurance reads as under:‑ "In case of loss or damage which may result in claim being made here under, the Assured undertakes to cause appropriate measures to be taken to prevent any remedy against any carrier or other bailee becom ing barred by reason of non‑compliance with terms and conditions governing the liability of such carrier or other bailee. Should expenses be incurred thereby underwriters will reimburse the Assured for such expenditure provided the loss or damage falls within the provisions of this insurance."

8. The learned counsel for the Insurance Company has also referred to clause 9 of the Institute Cargo Clauses (F. P. A.). This clause is as under: "It is the duty of the Assured and their Agents, in all cases, to take such measures as may be reasonable for the purpose of averting or minimizing a loss to ensure that all rights against carriers, bailees or other third parties are properly preserved and exercised."

9. These Clauses arise from the Doctrine of Subrogation, as defined under section 79(2) of the Marine Insurance Act, 1906. This sub‑clause reads as under:‑ "Subject to the foregoing provisions, where the insurer pays for a partial loss he acquires no title to the subject‑matter insured or such part of it as may remain, but he is thereupon subrogated to all rights and remedies of the Assured in and in respect of the subject‑matter insured as from the time of casualty causing the loss, in so far as the Assured had been indemnified according to this Act by such payment for the loss." Thus subrogation springs not from payment only, but from actual pay ment conjointly with the fact that it is made pursuant to the basic and original contract of indemnity. The right of subrogation therefore rests upon pay ment and if no payment is made the right does not arise at all.

10. In the present case a claim was preferred against the Insurance Company on hearing from the clearing Agents that the goods were damaged due to bursting of the paper bags. The surveyors appointed by the Insurance Company noticed the damage while the goods were lying in the K. P. T. sheds. Service of notice on the carriers after the removal of the goods from K. P. T. sheds to the godowns of the consignee cannot be regarded as an omission on the part of the consignee resulting in the remedy against the carrier or the bailee becoming barred. All that Article 3(6) provides is that if notice is not given before removal of the goods, if the loss or damage is apparent or within 3 days of such removal, if the loss or damage may not be apparent, such removal shall be prima facie evidence of the delivery by the carrier of goods as described in the bill of lading. Non‑service of notice does not bar the remedy but it only shifts the onus of proof from the carrier to the consignee and makes the task of establishing liability of the carrier depend ing on evidence. Mere delay in service of notice on the carriers will not absolve the Insurance Company of its liability under the Insurance Policy. The carriers acknowledged receipt of the notice under their letter Exh. 5/4 but this notice has reached them on 22nd of July after the goods had been removed from the K. P. T. sheds to the consignees godown. This is not the case of collusion between the Assured and the Carriers resulting in rights against the carrier not being preserved. In any case, it has yet to be seen whether the Carriers could be held liable for this loss in weight on account of leakage caused by bursting of paper bags or insufficiency of packing. The Insurance Company are bound by the Survey Report of the surveyors appointed by them at the request of the consignee to the extent of the loss of the cargo and its value according to the invoice. The amount of compensation claimed for the loss can therefore hardly be disputed. 10‑A. Regarding the liability of the Carrier for the loss or damage to tae cargo, the learned counsel for the defendant No. 2 has placed reliance mainly on 3 issues. They are that the loss or damage to the cargo has not been established as against the Carriers and they are not, therefore, answerable for such loss. That in any case the suit against the Carriers is barred by limita tion. Lastly, that the suit is bad for non‑joinder of the Karachi Port Trust as a necessary party.

11. It has been argued by Mr. Saleem Akhtar, Advocate on behalf of the defendant No. 2 that the consignment was discharged in good order or condition and delivered against a clean receipt. That removal of goods without notice was prima facie evidence of goods having been removed with out any loss or damage. That in the absence of a joint survey by the Carriers and Insurance Surveyors after due notice to them, the survey report of the Surveyors appointed by the Insurance Company was not binding upon the Carriers. That the outturn report of the Tally Clerk showing damage in respect of 10 bags only, was no evidence of bursting of 225 out of 1086 bags. That the plaintiffs had thus failed to prove damage to the cargo as against the Carriers. The delivery receipt for the packages issued by the Karachi Port Trust Exh. 13/5 shows that in all 1086 bags of this cargo were delivered and received by the consignee "in good order and condition". Thus the bags were removed from the K. P. T. sheds and taken delivery of under a clean receipt. The damage, to the bags due to bursting being apparent damage should have been visible at the time the cargo was discharged and kept in the Karachi Port Trust sheds. The consignee or their agent who cleared the goods should have noted this damage on the receipt in case they were not satisfied with the condition of the goods but that was not done. Before given (sic) to the Carriers under Article 3(6) of the Schedule to Carriage of Goods by Sea Act, but even this was not done. The burden of proving loss or damage is on the consignee. The plaintiffs have failed to discharge this burden affirmatively. It was their duty to establish prima facie that the loss or damage to the paper bags occurred on board the ship on account of bad stowage or rough handling or in discharging the goods on the wharves. The possibility of goods having been damaged in transit from the Karachi Port Trust sheds to the godown of the plaintiffs cannot be excluded when the survey took place in the godown and not while the goods remained in the. K. P. T. sheds. The Survey Report by the Surveyors appointed by the Insurance Company is also not binding on defendant No. 2 since‑ no notice of such survey was given to the defendant No. 2 or their agents and the survey was ex parte as against them. In P L D 1968 Kar. 252, this principle has been explained that only the report of the joint survey of which the Carriers have notice, is binding on them and the survey of which they had no notice and which was not carried out in their presence and the result of which is not corroborated by other evidence cannot be held to be binding of the Carrier. Initially the plaintiff must show prima facie that loss or damage to his goods occurred while the goods were in the hands of the Carriers. The Carrier then must prove that he took all the reasonable care of the goods as a bailee and the damage to the cargo had resulted from a cause beyond his control coming within any of the exceptions such as perils of the seas, in herent vice, insufficiency of packing etc. The defence of the Carriers in this case is the denial of any loss or damage on the ship because by giving a, clean receipt and removing the goods without notice of any damage the burden lay heavily on the plaintiff to prove such loss or damage as against the Carrier, The plaintiff has accordingly not been able to discharge this burden from the evidence, oral or documentary.

12. In any case the suit against the Carriers is barred by Limitation. Under Article III, Rule 6 of the Schedule to Carriage of Goods By Sea Act "the Carrier and the ship shall be discharged from all liabilities in respect of loss or damage, unless suit is brought within one year after delivery of the goods or the date of when the goods should have been delivered." In this, case delivery of the goods was taken on 17‑7‑1967 while the suit was filed on 26‑2‑1969, the suit, is therefore clearly time‑barred.

13. It has been argued by Mr. A. Rauf on behalf of, the plaintiff that Article 115 of the Limitation Act relating to breach of contract should apply in this case also but it has rightly been pointed out by the learned counsel on behalf of the defendant No. 2 that the. appropriate Article for breach of contract of carriage would be Article 30 under which the period of Limitation prescribed is one year from the time, loss or injury to the goods occurred. The suit having been brought in a Pakistan Court, whatever, the substantive right 'of the parties may be, the Lex Fori would determine the procedural as pect of the dispute. The law of Limitation governing the suit consequently would be Article 30 of the First Schedule to the Limitation Act as held in P L D 1967 S C

68. The position would, therefore, be identical to that under clause (6) of Art. III of Schedule to the Carriage of Goods by Sea Act prescribing the period of Limitation to be one year from the delivery of the goods to the consignee. In P L D 1957 Kar. 315, this principle has been clearly explained that the right of the plaintiffs to claim from the ship the value of the cargo sought to be delivered, is extinguished at the expiry of one year from the date when such cargo has been delivered or ought to have been delivered. This was also the view taken in a similar case reported in P L D 1961 Dacca

39. In A I R 1931 Sind 124, it was emphasized that Art. 3, clause 6 of the Schedule to the Carriage of Goods by Sea Act does not limit the time but extinguishes the right to sue after lapse of one year. The result is that the suit against defendant No. 2 stands clearly barred by limitation.

14. The only point that remains to be discussed is, regarding the non. maintainability of the suit, because the Karachi Port Trust has not been joined as a necessary party. The Karachi Port Trust are statutory bailees and delivery to the Karachi Port Trust is on behalf of the consignee as held in A I R 1931 Sind

124. This is also the view taken in A I R 1959 Mad.

367. In 4 1 C 475 and 42 I C 659, the same view of the claw has been emphasized. The Karachi Port Trust are not, therefore, the agents of the Carriers and the Carriers have no control over them. However, the plaintiff has not claimed any relief against the K. P. T., nor is there any allegation that the damage to the goods occurred while they were in custody of K. P. T. The K. P. T. need not to have been joined as a necessary party.

15. In the result, the suit is decreed against defendant No. 1 only for Rs. 30,510 with interest at 6 per cent. per annum from the date of the suit till ‑realization : together with the costs of the suit. The suit is dismissed against defendant No. 2 with no order as to costs since the dismissal is on the basis .of suit being barred by limitation and on technical grounds. K. B. A. Suit decreed.