P L D 1971 Karachi 56 (PLP)

10. I shall first consider the provisions of the said Act in so far as they are relevant to the arguments advanced before me. Article 1(b) in so far as it is relevant, reads as follows :- "Contract of carriage applies only to a bill of lading or any similar document of title in so far as such document relates to the catriage of goods by sea . . . . ." Sub-rule (e) then states :- "Carriage of goods covers the period from the time when the goods are loaded on to the time when they are discharged from the ship." Article III states: "Subject to the provisions of Article 6 under every contract of carriage of goods by sea the carrier in relation to the loading, handling stowage, carriage, custody, care and discharge of such goods shall be subject to the responsibilities and liabilities and entitled to the rights and immunities hereinafter set forth." Article III imposes a duty on the carrier to provide a seaworthy ship and prescribes its liabilities, whilst Article IV contains the rights and immunities on which a carrier can rely for his defence. These provisions were construed in Pyrane Co. Ltd. v. Scindia Steam Navigation Co. Ltd. ((1954) 2 A E L R 158) and as this judgment has the approval of the Supreme Court in Evst & West Steamship Co. v. Hossain Brothers and others (P L D 1968 S C 15) I shall consider it. The facts of this case were that the plaintiffs had shipped a piece of Machinery, a fire tender, and as it was being lifted on board the defendant's steamer by its tackle and before it was across the rail, it was, through the fault of the ship, dropped and damaged. The carrier repudiated liability on the ground that the damage had occurred before the cargo had crossed the ship's tackle. According to the older English Authorities, loading was a joint operation between the shipper and the carrier and, as pointed out by Devlin, J. those authorities had laid down the rule "that loading is a joint opera tion, the shipper's duty being to lift the cargo to the rail of the ship (I shall refer to them as the first stage of the loading) and the ship owner's duty to take it on board and stow it (I shall refer to that as the second stage)." Devlin J., (as he then was) did not approve of this view, and after examining the provisions of the said Act and especially the liabilities imposed on the cargo under Article III, he observed at page 163 as follows:- "Article III (2), for example, provides: "the carrier shall properly and carefully load", etc. If "load" includes both stages, does that oblige the shipowner, whether he wants to or not, to undertake the whole of the loading? If so, it is a new idea to English lawyers, though, perhaps, more revolutionary in theory than in practice. But, if not, and "load" includes only the second stage, then should it not be given a similar meaning in Article II with the result that immunity extends only to the second stage? There is, however, a third interpretation to Art. III (2). 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 does properly and carefully. The former interpreta tion, 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 Edn., 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, or to 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 discharging are brought within the carrier's obligations is left to the parties themselves to decide." I am in respectful agreement with these observations, and applying the principle laid down in these observations I hold that the first defendant's liability commenced when the said bales had, been lifted by the s. s. Ocean Energy's tackle, or, at the earliest. B when they had been received by the first defendant for this purpose. But there is nothing in the judgment or in the sai4 Act to support learned counsel's submission that the first defen dant had become responsible for the custody of the said bales as soon as they had been brought to Juna Bunder or to the quay side from where they were eventually loaded.

11. There is also nothing in the provisions of the Karachi Port Trust Act or in the terms of the bills of lading issued to the plaintiffs to support Mr. Kazmi's argument that the first defendant had accepted responsibility for the said bales at some earlier stage of the loading operations. However, learned counsel submitted that his argument was supported by the judgment of the Supreme Court in East & West Steamship v. Hossain Brothers and others and I shall now consider this judgment.

12. The facts in the judgment cited were that the carrier, the East and West Steamship Company, had contracted under its bills of lading to deliver cargo to the respondents at Chittagong, and the cargo had been damaged in a lighter which was unseaworthy. However, the bills of lading contained a cesser of liability clause which stated that the cargo would be discharged into lighters at the outer anchorage, Chittagong at the shipper's risk and that the carrier's 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 purpose and in every respect of shippers or consignees." On the basis of these clauses the carrier submitted that its liability as a carrier under the said Act had terminated as soon as the respondent's cargo had been discharged from the ship's tackle, therefore it was not responsible for the damage irrespective of how it occurred. In repelling this contention their Lordships held that the carrier's liability continued until the respondent's cargo had been delivered at Chittagong and in coming to this conclusion they had approved of the judgment of Devlin J. in Pyrene Co. Ltd. v. Scindia Steam Napigation Co. Ltd. to which I have already referred. According to learned counsel, this judgment supported his argument by parity of reasoning, but the carrier's liability in the judgment cited was based on the provisions of the said Act and the terms of the contract of affreightment contained in the relevant bills of lading. The judgment can support learned counsel's argument only if he can show that in the instant case the first defendant had become liable for the said bales either under the provisions of the said Act or under the terms and conditions of its bills of lading. As learned counsel's argument is not based either on the provisions of the said Act or the terms and conditions of the first defendant's bills of lading, the judgment cited is of no assistance whatever to his argument. 12-A. Learned counsel then submitted that his case was supported by a passage in Carver's Carriage of Goods by Sea, 11th Edition, para.

198. This para states:- . "The shipowner becomes responsible as a carrier for all goods which have been delivered to him, or to his authorised servants, for the purpose of bang carried. It is not necessary that they should have actually got on board. Thus, delivery, to the mate on the quay, along side which the vessel is lying, is sufficient. And if the goads have to be taken to the ship in lighters, and that is done by the shipowner, he becomes responsible, in the absence of express stipulation or custom to the contrary, from the time of taking delivery for the purpose of lightening them. In each case the question is, had the goods been delivered into the ship owner's custody for the purpose of being carried ? The usual course, when a vessel is lying along side a quay, appears to be for the shipper to place the goods on the quay, and to take a receipt therefrom the mate or person in charge of the ship; and for the ship to do the work, and bear the expense, of putting the goods on board." I agree with learned counsel that these observations state the correct law. The principle contained in these observations is that the carrier's liability commences either when the goods are loadea into its lighters or when theyare delivered to it against a document such as a mate's receipt, and I shall now examine whether the plaintiff's case is supported by these observations.

13. I shall first consider the plaintiffs' claim for damage to its bales of cotton piece goods. It is common ground between the parties that these bales were brought to Juna Bunder in trucks owned either by the first plaintiff or its clearing agent and unloaded at Juna Bunder. Thereafter, at some time, which is not known, these bales were loaded into lighters hired by the first plaintiff or its clearing agent and delivered from these lighters to the s. s. Ocean Energy. The plaintiff examined Mr. Muhammad Ikramuddin, an employee of its Lighterage Contractors, and Mr. Kazmi referred me to the following passage in his evidence: "The jetty at Juna Bunder is not covered by sheds but is open ..When goods are sent, to us for loading on a vessel they are brought in trucks to the export jetty and left there." Both, according to the plaintiffs and the first defendant, it was raining in Karachi on the 21st and 22nd July 1965, and, as these bales were loaded on the s. s. Ocean Energy on the 21st and 22nd July Mr. Kazmi submitted that it should be presumed that these bales had been damaged by rains whilst they were lying in the open at Juna Bunder after they had been left there by the first plaintiff, therefore, according to learned counsel, the first defendant was responsible for the damage in dispute. But according to the principle contained in Carver's observations, as the Lighterage Contractors were the agents of the first plaintiff and not of the first defendant, it is clear chat the first defendant's responsibility did not commence until these bales had been loaded from the lighters on to the s. s. Ocean Energy.

14. Additionally, the argument of learned counsel is utterly fallacious on other grounds also. In the first place, the plaintiffs have not produced any evidence to show that these bales had been brought in good order and condition by their trucks to Juna Bunder, Secondly, there is no evidence to show when these bales had been brought to Juna Bunder and how long they had remained there before their removal by the first plaintiff's Lighterage Contractors. Thirdly, even the first plaintiff's Manager, Mr. Iqbal Hussain, who was a most unreliable witness, did not say that the first plaintiff had ever informed the first defendant that it had left these bales at Juna Bunder, therefore the argument that the first defendant became responsible for the custody of these bales when it was not even aware that they had been brought to Juna Bunder is totally without merit, and the first defendant is not liable for the damage to these bales of cotton piece goods.

15. I now turn to the plaintiffs' claim for damage to its consignment of bales of cotton yarn shipped under Bill of Lading No.

338. It is admitted before me that these bales bad been loaded by .the first plaintiff into railway wagons at Thola Produce Yard, brought in these wagons to the quay side and discharged there by the K. P. T. after which they were loaded on the s. s. Ocean Energy. Mr. Kazmi feebly argued that the first defendant's responsibility as carrier commenced when the first plaintiff had loaded these bales into the K. P. T's railway wagons. But there is neither any evidence of the 'condition of these bales when they were loaded into railway wagons nor any evidence to show when they had been so loaded, or that the first defendant had been informed about it. Mr. Kazmi therefore did not press this argument.

16. Learned counsel next submitted that the first defendant's responsibility as a carrier for these bales began as soon as they had been discharged on the quay side from the railway wagons of the Karachi Port Trust. But learned counsel could not refer me to any provisions either of the said Act or of the Karachi Port Trust Act in support of this argument nor have I found any provisions in these Acts in support of this argument. The plaintiffs have also produced no evidence of the condition in which these bales had been discharged from the railway wagons or of the date and time when they were so discharged. There is also no evidence to show that the first defendant had been informed about this discharge, much less any evidence to show that the first defendant had accepted responsibility for these bales when they were discharged from the railway wagons or given a receipt for them, therefore learned counsel's argument is not supported by the observations of Carver on which he relied.

17. Finally, learned counsel, who has argued a difficult case with ability, submitted that the first defendant's responsibility as a carrier under the said Act began as soon as it had commenced loading these bales, that it was raining heavily whilst these bales were being loaded so that they had got wet during the loading operations, therefore the first defendant was liable for the damage in dispute. As I have explained in para. 10, the first defendant's responsibility as a carrier under the provisions of the said Act began not when the bales had crossed the ship's rail or been unloaded from its tackle on its deck (which is, in the words of Devlin, J. the second stage of the loading operations), but as soon as the bales had been lifted by the ship's tackle (which is described by Devlin J. as the first stage of the loading operations), therefore although the endorsements on the bills of lading are prima facie evidence of the condition of these bales, as these endorsements relate to their condition in the second stage of the loading operations, the plaintiffs are not precluded by these endorse ment from proving that these bales had not been damaged at the first stage of the loading operations. However, as the bills of lading are prima facie evidence of the condition of cargo at the time of shipment, the burden of proving that these bales were not damaged at the first stage of the loading operations falls heavily on the plaintiffs. In order to discharge this burden of proof, learned counsel relied on the truck notes issued jointly by the Karachi Port Trust, and the first defendant (Exhs. 17, 18/1-18/171, and 28) when these bales were loaded from the jetty to the s. s. Ocean Energy. These truck notes show the number of bales loaded but, as they do not contain any endorsements to show that these bales were damaged or stained by water prima facie they support learned counsel's arguments.

18. Mr. Hassan therefore argued that, as these loading truck notes were not issued under the provisions of the Karachi Port Trust Act they were of no evidentiary value. Here I have to observe that when cargo is discharged from a ship in Karachi it is delivered to the Karachi Port Trust, which is required under section 39 of the Karachi Port Trust Act, to give a receipt to the carrier showing the number of packages landed and their condition. This receipt is generally known as the truck note and is prepared by the carrier and the Port Trust jointly, Although there is no statutory provision requiring the Karachi Port Trust to issue truck notes when cargo is loaded on a ship, it is customary for the carrier and the Port Trust to issue loading truck notes also. In accordance with this practice, the truck notes in the instant case were prepared jointly by the Port Trust and the first defendant, therefore merely because they were not prepared under the provisions of the Karachi Port Trust, it cannot be said that they have no evidentiary value, and learned counsel's argument is without merit.

19. Mr. Hassan then argued that the object of the loading truck notes was merely to have a record of the number of packages loaded on a ship and these truck notes never showed the condition of the packages thus loaded. This argument is supported by the evidence of the first defendant's cargo supervisor, Mr. Abdul Ghani, and it is obvious that, as the cargo under the loading truck notes is not received by the Karachi Port Trust, it may not be particular about the condition of the cargo which it tallies with the carrier. However, the plaintiffs examined a traffic supervisor of the Karachi Port Trust, Mr. Hassan Khan. In reference to the question as to why the damage was shown to on the bales loaded under the truck notes in dispute he explained that this was "because we do not receive damaged cargo". The answer was not only absurd but incorrect, because the question of receiving cargo by the Port Trust, when it is loaded on a ship, does not arise. Further, in his cross-examination, the witness went back. On his statement and said that he was not sure about the position. I have to observe here with regret that he was not a witness of truth, therefore Mr. Abdul Ghani's evidence is more reliable. But as he was an interested witness, it cannot be accepted without corroboration. There are however other circumstances which lend support to Mr. Hassan's argument. Thus in the instant case, according to the endorsements on the Bill of Lading No. 338 more than 500 bales are shown as stained with water. It is obvious that it would take considerable time to load such a large number of bales. Now, according to Mr. Kazmi, as these bales were being loaded whilst it was raining, they were damaged by rain and described as water stained in the bill of lading. But if so many bales were damaged by rain during the loading operations, as the s. s. Ocean Energy was also berthed on the same quay where the bales were lying during the pendency of the loading operations, it is impossible to believe that the bales lying on the quay would not have got wet in the rains. But according to the truck notes (Exhs. 17, 18/1 18/171, and 28) no bales whatsoever were shown as water-stained, therefore this suggests that the object of the loading truck notes might have been only to tally the number of packages loaded. Additionally, it is relevant to observe here that not only have the Plaintiffs not produced evidence to show that loading operations on t he quay side were carried on whilst it was raining, but they have also not cross-examined Major Nanavati, the defendant's Manager, on this allegation. Further, according to the log books of the s.s. Ocean Energy, loading operations were stopped both on 21st and 22nd July 1965 whenever it rained. The log book has to be presumed to be correct under the Commercial Docu ments Act, 1939, and as there is no evidence in rebuttal, the statements in the log books have to be accepted as correct. In all the circumstances discussed it is clear that these loading truck notes either do not correctly show the condition of the said bales or were intended only to show the number of packages loaded on the s. s. Ocean Energy and not their condition. The result is that there is no evidence to show that the first plaintiff had delivered these bales in good order and condition to the first defendant, therefore learned counsel's argument that these bales were damaged by water after the first defendant had commenced loading them is not supported by any evidence and has to be rejected.

20. I now turn to the plaintiffs' claim for loss of 6 bundles of cotton yarn. As I have observed, bales of cotton yarn were shipped under bill of lading contains an endorsement which states: "19 bales cover torn". As this endorsement does not mean that there was any shortage of contents in the bales when they mere received for shipment, in view of the survey reports, the plaintiff has proved that these 6 bundles were lost whilst they were in the custody of the defendants. As the carrier's immunity for "insufficiency of packing" under rule 2(n) of Article IV of F the said Act is subject to its obligations under Article III the defendants had to give evidence to show that this loss occurred despite reasonable care on their part. They have not produced any evidence in this respect, but Mr. Hassan submitted that the first defendant was protected from liability on account of the above-mentioned endorsement on Bill of Lading No.

338. As it had accepted these bales for shipment, it cannot escape its liability merely by pointing out that there was some unspecified defect in the covers of the bales. The effect of insufficient packing is always a question of fact. Thus, for instance, when cargo, like rice or rape-seed, is loaded in bags some loss in the cargo is inevitable in the process of shipment if the bags are torn. But there is an obvious difference between grains of rice falling out of a bag which is partially torn and the loss of a bundle of cotton yarn weighing 10 pounds from a bale which is partially torn. In the former it can reasonably be argued that the loss, provided it is reasonable, is beyond the carrier's control. But the loss of an article like a bundle of yarn cannot be explained in this manner, therefore, as the defendants have produced no evidence about the care taken by them of these bales, they are liable to the plaintiffs for this loss.

21. The only question that remains for determination under this issue is of the amount of compensation claimed by the plaintiffs. As the compensation claimed relates to cotton piece goods and cotton yarn of a very well known make, the plaintiffs had to give evidence about the market price of these commodities when their cause of action arose. Although learned counsel took frequent adjournments before me, I am astonished that the plaintiffs have produced no evidence of the market price of the cotton piece goods for which they have claimed compensation. Instead, they rely on the invoices sent by the first plaintiff to its own office in East Pakistan. However, there are two sets of invoices for the 300 bales of cotton piece goods shipped by the first plaintiff: According to the invoice (Exh. 16) the value of these 300 bales is Rs 4,47,657.75, whilst, according to the other set of invoices (Exhs. 26 and 27) the value of these 300 bales is Rs. 7,11,

650. It is even more amazing to note that both sets of invoices bear the same date, 22nd July 1965. Not only does this enormous discrepancy in the price shown in these two sets of invoices cast very great doubt on the first plaintiff's evidence, but even Mr. Iqbal Hussain was not able to explain away this discrepancy. It is therefore obvious that these invoices have no evidentiary value whatsoever with the result that the plaintiff has completely failed to prove its claim for damage to the cotton piece goods.

22. The plaintiff has however examined Mr. Moosa Bhai to prove the price of the cotton yarn which it had shipped. This witness belonged to the Yarn Merchants Association and he has produced the market reports of his Association. According to these reports. Exhs. 14/4 to 14/6, the price of the cotton yarn in dispute was Rs. 24.35 per bundle between 3rd August and 5th August 1965. As the defendants have admitted that the s. s. Ocean Energy arrived in Chittagong on 3-8-1965 and have not specified the date when the plaintiffs' bales of cotton yarn were discharged, this evidence is sufficient to prove the market rate of the cotton yarn when the cause of action of the plaintiffs arose. However, according to Mr Hassan, this evidence was not sufficient because these market reports related to the price of cotton yarn in Karachi and not in Chittagong. As cotton yarn is a commodity which tends to have a fairly uniform price throughout the country, subject to freight and transport charges, learned counsel should have cross-examined Mr. Moosa Ehai on the alleged difference in prices between Karachi and Chittagong. His failure to cross-examine the witness properly leads to an adverse inference against his argument, therefore I accept the evidence of these market rate of cotton yarn in Chittagong. But as the plaintiffs have failed to prove that the damage by water to the bales of cotton yarn was caused by the defendants, they are entitled to recover from the first defendant only the price of the 6 bundles of cotton yarn which, at the rate of Rs. 24.25 per bundle, amounts to Rs. 145.50.

23. Issue No. 3.

As the second defendant is the local agent in Chittagong of a Pakistani carrier, Mr. Hassan submitted that it has been unnecessarily impleaded and should be awarded compensatory costs. Mr. Kazmi admitted that there was no difficulty in suing the first defendant and that, in view of the provisions of the Contract Act, it was not necessary to sue the second defendant. However, he submitted that the second defendant had executed a bond under section 64 of the Sea Customs Act, therefore on the basis of a judgment of this Court in Pak Industrial Chain Co. v. American Oriental Lines Ins. And another (P L D 1968 Kar. 89) he submitted that the second defendant had been rightly impleaded. In the judgment cited Noorul Arfin, J. has decreed a claim against a local agent of a foreign carrier on the basis of a bond executed by the local agent under section 64 of the Sea Customs Act. However, the carrier in that case was a foreign carrier, and the plaintiffs had proved the bond executed by the local agent. In the instant case, the first defendant is a local carrier and not a foreign carrier so that it was unnecessary to sue its Chittagong agent. Further, unlike the judgment cited, the plaintiff have not produced the bond alleged to have been executed by the second defendant, therefore the judgment cited is distingu ishable. In view of the provisions of the Contract Act. I agree with Mr. Hassan that the second defendant has been unnecessarily impleaded. The practice of suing the local agent puts the local agent to unnecessary expense and should be discouraged, I therefore award the second defendant Rs. 200 as special costs.

24. In the result, the plaintiffs' claim is decreed in the sum of its. 145.50 with interest at 6 per cent. from the date of the suit till the realisation of the decretal amount. The plaintiffs are entitled to costs on the said amount and, on the other hand, the first defendant is entitled to costs on Rs. 26,822.75 being the amount for which the plaintiffs' claim is dismissed. The plaintiffs will also pay Rs. 200 to the second defendant as special costs. A. E. Suit decreed partly.