P L D 1968 Karachi 89 (PLP)

(1) Whether the suit is barred by section 69 of the. Partner-ship Act? (2) Whether the suit is barred by time? (3) Whether this Court has no jurisdiction to try the suit? (4) Whether any goods out of the consignment in question carried under‑Bill of Lading dated 25‑6‑1961 were not delivered to the plaintiffs. If so to what damages are the plaintiffs entitled? (5) Which of the defendants, if any, are liable to the plaintiffs and to what extent? (6) To what decree, if any are the plaintiffs entitled?

5. This case came up before me on 7‑31967, when both Mr. Sharaf Faridi, the learned Advocate for defendants Nos. 1 and 2, and Mr.

1. A. Lari, the learned Advocate for defendant No. 3, stated that these defendants did not press issues Nos. 1, 2 and 3 and the first part of issue No.

4. With regard to the second part of issue No. 4 Mr. Lari stated that the defendants No. 3 was liable only for the insured value of the goods under the "institute of cargo clause" subject to which insurance policy had been issued. Mr. Sharaf Faridi stated that he would not press the second part of issue No. 4 also, as, in his opinion, the point raised was redundant as it was covered by issues Nos. 5 and

6. It was further stated by Mr. Sharaf Faridi that the defendant No: 2 were not liable for the claim in the suit as these defendants did not file any declaration under section 64 of the Sea Customs Act with respect to the vessel ss "Thunder Bird". The case was adjourned, at the request of the learned advocates, to 15‑3‑

67. On this date, Mr. Sharaf Faridi made another statement in Court admitting that the Bill of Lading for the consignments in suit did mention that 280 (sic) skids were received on board 'the vessel ss "Thunder Bird", but contended that this mention of the quantity in the Bill of Lading did ‑not prove that this quantity was in fact brought on the ship. But the learned Advocate agreed that the defendants Nos. 1 and 2 had to discharge the burden of showing that th,. quantity of the goods brought on the ship was actually short of the quantity mentioned in the Bill of Lading. The hearing of the case was again adjourned, at the request of the learned Advocates, to 4th April 1967, when the plaintiffs examined one witness, namely, Muhammad Anwar Khan, an Upper Division Clerk in the Office of the Collector of Customs. The defendant No. 2 examined their Deputy Cargo Manager, namely, Mr. Ashfaq Hussain, and the defendant No. 3 tendered the evidence‑ of the Supervisor of their Marine Claims Department, Mr. Jaimy Lawyr. The defendants Nos. 1 and 2, however, failed to bring any evidence on the question as to the quantity of the goods actually received on board the vessel ss "Thunder Bird". 'In the absence of this evidence, the quantity of 280 (sic) skids, mentioned in the Bill of Lading, will have to be treated as the quantity actually received by the carriers on their vessel.

6. After the conclusion of the evidence, Mr. I. A. Lari, the learned Advocate for the defendant No. 3, conceded the plaintiffs' claim and stated that the insurers, namely, the New Jubilee Insurance Co. Ltd., accepted their liability for the claim in the suit. Mr. Sharaf Faridi, the learned Advocate for defendant No. 1, also made a statement that he did not dispute the liability of the defendant No. 1 for short‑delivery of 10 skids. The contest in the suit, therefore, proceeded from this stage only between the plaintiffs and the defendant No. 2, and centred on the question of defendant No. 2's liability as the carriers' agent in Pakistan.

7. It is not disputed that there is no privity of contract between the plaintiffs and the defendant 'No.2 and that the liability of these defendants could arise only as, carriers' agent in Pakistan under section 64 of the Sea Customs Act (VIII of 1878). It may here be convenient to refer to the provisions of this statutes which are relevant to the matter in controversy. These provisions are contained in Chapter VII and section 202 of the Act, which lay down the procedure for arrival and departure of vessels in and from the ports of Pakistan and for appointment of ships' agents. Under sections 53 and 54, the Master of any vessel arriving in any port in Pakistan is required to deliver a manifest to the Customs Authorities. Under section 55, the manifest should specify all the goods imported in such vessel, showing separately all goods intended to be landed, transhipped or taken on to another port. Section 60 provides that the Customs Collector may accept delivery of the manifest from the ship's agents in lieu of the ship's Master. Provision for appointment of ships' agents is made by section 202 of the Act, under which no person shall act as an agent for the transaction of any business relating to the entrance or clearance of any vessel, or the import or export of goods or baggage in any custom house unless such person holds a licence granted in this behalf in accordance with the rules made under subsection (3). Under section 63, the application for port clearance has to be made by the Master of the vessel at least 24 hours before the intended departure of the vessel and such application is to be accompanied by an export‑manifest specifying the goods to be exported in the vessel and by such shipping bills and other documents as may be required by the Customs Collector. Section 64 empowers the Customs Collector to refuse port clearance to any vessel unless (a) the provisions of section 63 are complied with; (b) , all port dues and other charges and penalties and duties have been duly paid; (c) the ship's agent delivers to the Customs Collector a declaration in writing to the effect that he will be liable for any penalty imposed under section 167, item No. 17, and furnishes security for the discharge of the same; and (d) the ship's ,agent delivers to the Customs Collector a further declaration in writing to the effect that such agent is answerable for the discharge of all claims for damage or short delivery which may be established by the owner of any goods comprised in the import cargo brought by such vessel.

8. The admitted position is that the defendant No. 2 are ship's agents, having been licensed under section 202 of the Sea Customs Act, and that they, as such agents, filed import manifest in respect of the vessel ss "Thunder Bird," under section 60 of the Act and acted under section 63 in connection with the departure of the vessel from Karachi. These defendants would, therefore, be liable for short‑delivery of the plaintiff's' goods if they had given a declaration in writing under section 64(d) assuming responsibility for claims of damages or short delivery of the goods comprised in the ship's import cargo. The plaintiffs brought on record, through plaintiffs' witness Muhammad Anwar Khan, an Upper Division Clerk in the office of the Collector of Customs, a declaration, Exh. 7/1, deposited by defendant No. 2 with the Customs Collector on 15th April 1959. This declaration reads as under:‑

"We Messrs Maritime Agencies Limited Agents in con sideration of Port Clearance being granted to vessels hereby declare under section 64 of the Sea Customs Act, 1878 (VIII of 1378) that (1) e are liable for any penalty imposed under section 167 (17) with respect 'to any goods entered in the Import Manifest of the vessels and (2) are answerable for the discharge of all claims for damage or short delivery which may be so established by the owner of any goods comprised 'in the Import Cargo in respect of such goods."

9. It will be seen that the writing Exh. 7/1 is a declaration both under section 64 (c) and (d). But Mr. Sharaf ' Faridi, the learned Advocate for defendants No: 2, contended that this declaration, to the extent that it purports to be a declara tion under section 64 (d) also would not be effected in the present case, because under section 64 declaration assuming responsibility for claims of damage and short delivery have to be filed for each vessel separately: It is contended that no such separate declaration was filed by the defendant No. 2 with respect to ss "Thunder Bird" and, therefore, no liability can be fixed on these defendants for short delivery of the plaintiffs' skids. But this argument is misconceived. The requirement of section 64 is that the Customs Collector may refuse port clearance to any vessel until . . . the ship's agent shall deliver to the Collector of Customs "a declaration in writing to the effect that such agent is answerable for the discharge of all claims for damage or short‑delivery", with regard to any goods comprised in the import cargo of such vessel. The words "a declaration" in section ‑64 (d) do not mean that a separate declaration should be filed for each vessel. A declaration within the requirement of this provision may be a general and continuing declaration to cover a ships agent's liability for all vessels for which he may act as agent under the Sea Customs Act. A general or a continuing declaration under section 64 (c) and (d) is expressly permitted to be filed under the rules framed by the Central Board of Revenue to regulate the grant of port‑clearance to vessels under sections 64 and 66 of the Sea Customs Act. These rules have been framed under the rule‑making powers conferred by section 9 been this Act and appear at pages 63 and 64 of the "Sea Customs and‑12 other Acts" (Second Edn. 1963) by Mr. Abaidul Haq Chowdhury. These rules are as under :‑-- "(1) When a vessel is laden and ready to proceed to a foreign port, but has not cleared her inward manifest and put in the documents required by section 63 port clearance shall not be granted unless the agents have signed an agreement in terms of section 64 (u) and (b) and section 66 and a declaration under section 64 (c) and (d) in the prescribed Form. The Customs Collector may, when he considers it expedient and subject t9 the agent's delivering the aforesaid declaration and agreement under sections 64 and 66, grant port clearance to a vessel before it is laden and ready to proceed to Sea. (2) A coasting vessel, to which the provisions of section 64 and section 66 have been extended by rule under section 151 (a) of the Sea Customs Act, shall be allowed to take her' port -clearance under an agreement and a declaration in advance of her being laden and to continue to take in cargo until she is ready to sail. (3) Notwithstanding anything contained in Rule 1, agents, with the permission of the Chief Customs‑Officer, may execute, in lieu of the prescribed form a continuing agreement and declaration for any vessel for which they may be duly appointed agents. (4) The Customs Collector may if he is satisfied regarding the status and solvency of the agents dispense with the security provided for in clause 4 of the agreements mentioned above."

10. The declaration Exh. 7/1 was given in pursuance of rule 3 of the above rule and is in the form prescribed by the Chief Customs Authority (which is reproduced on page 66 of Mr. Chowdhury's book). This declaration constitutes a conti nuing agreement and declaration that the defendant No. 2 would be liable for all claims of damage and short delivery in respect of the vessels of which they are agents. This declaration, therefore, dispenses with separate declarations for each vessel which may be granted port clearance through the defendant No. 2's agency. As has been noted above, the defendant No: 2 were in fact agents for the vessel ss "Thunder Bird", and in this capacity filed its import and export manifests. It is also not denied that this vessel was granted port‑clearance only on the strength of the declaration Ex h. 7/1. That this declaration is still in force, was admitted by the defendant No. 2's own witness, namely, D. W. Ashfaq Hussain, who stated that there defendants "filed a general declaration under section 64 of the Sett Customs Act", that is Exh. 7/1, and that the defendants "did not consider it necessary to file a separate declaration for ss "Thunder Bird" which arrived in July 1964". and that the declaration Exh. 7/ 1 "is still in force".

11. Thus under rule 3 of the rules framed by the Central Board of Revenue to regulate the grant of port‑clearance, it is open to a ship's agent to give general declaration uncle section 64 (d) for all vessels of which he is agent, in lieu of separate declaration for each vessel. Such a general declaration was given by the defendant No. 2 by writing Exh. 7/1, and this declaration, as admitted by these defendants' own witness, is still in force. It was, however, urged by Mr. Sharaf Faridi, the defendants' learned advocate, that section 64(d) should be strictly construed as it is in derogation of the general policy of law as evidenced by section 230 of the Contract Act, under which an agent, in the absence of a contract to that effect, cannot be made personally liable on the contracts of his principal. I am in agreement with the learned Advocate that section 64 (d) should be strictly construed. But the learned Advocate has failed to " show as to how strict application of this section will save the defendant No. 2 from liability for claims for damage and short delivery with respect to goods which were imported by ss "Thunder Bird". The only argument convassed in this connection was that section 64 required separate declarations to be filed for each vessel, but, as pointed out, general declarations in lieu of separate declarations for each vessel, have been permitted under the rules and it has not been shown that these rules suffer from any, invalidity or can in any way be said to be beyond the rule making power conferred on the Central Board of Revenue under section 9 of the Sea Customs Act.

12. For these reasons, I would reject the contention that Exh. 7/1 is not a valid declaration for the purpose of holding the defendant No. 2 liable under section 64 (d) of the Sea Customs Act for the claim in the present suit. In view of this conclusion, I decide issue No. 5 against the defendant No.

2. Under issue No. 6, I would hold that the defendant No. 2 are liable for the claim in suit, that is Rs. 33,923/60 (Rupees thirty -three thousand nine hundred and twenty‑three and sixty paisas) together with costs and further interest at six per cent. per annum from the date of the suit until payment.

13. No arguments were addressed by Mr. I. A. Lad on the question of "an alternate decree" in favour of defendant No.3. This question, in any case, does not arise, because it was open t these defendants either to file a separate suit to enforce their claim or to take "third party" proceedings in the present suit uncle the rules of the former Chief Court of Sind applicable to trial of civil suits on the original side. These defendants, however, have not adopted either of these courses. Accordingly, no decree can be given in their favour in the present suit.

14. Since defendant No. 1 as well as defendant No. 3 accepted their liability, I would decree the plaintiffs' claim as prayed against all these defendants jointly and severally. A. H. Suit decreed.