P L D 1966 (W (PLP)

QADEERUDDIN AHMED, J.‑

Eleven appeals bearing Nos. 73 to 78 of 1959 and Nos. 1, 2, 6, 7 and 11 of 1960 were preferred against the judgment of our learned brother, Wahiduddin Ahmad; J., dated the 13th of November 1959, by which he had decreed eleven suits. Appeals Nos. 1 and 2 of 1960 were withdrawn because, after the decree, the respondents had settled the dispute by paying the "dues" to the plaintiffs. The remaining nine appeals will be disposed of by this judgment. The paper book contains about 1,200 pages therefore, we propose to set out their gist in a few following paragraphs.

2. Eleven suits were heard and decided by the learned Single Judge. Three of them had been instituted by Messrs Dada Limited against the Muhammadi Steamship Co. and the Trans Oceanic Steamship Co., two were filed by Messrs Adam Ltd. against the Muhammadi Steamship Co. and the Trans‑Oceanic Co., two were filed by Haji Sattar Haji Muhammad against the Trans‑Oceanic Steamship Co. and United Oriental Steamship Co., two were filed by Messrs Dowjee Dadabhoy against the Muhammadi Steamship Co. and the United Oriental Steamship Co., one was filed by Muhammadi Trading Co. against the Muhammadi Steamship Co. and one was filed by Tar Muhammad & Co. against the Muhammadi Steamship Co. All the suits related to the voyages made by ss AI. Murtaza Ali, ss AI‑Hussaini, ss Kingshavan and ss Paralos in the month of May 1952, from Karachi to Chittagong. The cargo of the plaintiffs was carried in the ships and the plaintiffs were charged freight at a uniform rate of Rs. 61 per ton as well as Rs. 20 per freight ton for lighterage and demurrage. The case of the plaintiffs was that the shipping companies had incurred no expense towards lighterage and demurrage and were thus liable to refund the amounts which they had recovered under those two heads. The basic stand of the defendants was that the amounts were recovered at a uniform rate and were unrefundable as the freight.

3. The suits were consolidated by the consent of the parties who agreed that evidence be recorded in Suit No. 649 of 1963, but should be read as evidence in all the suits. It was also agreed that the issues framed in the above‑named suit should be taken to be the issues in all the suits. Four witnesses were examined on behalf of the plaintiffs. They were A. R. Siddiqui, Assistant Controller of Shipping of the Government of Pakistan, P. W. 1, Qasim, son of Tar Muhammad, Assistant Manager of Dada Limited, P. W. 2, Abdul Ghani, an employee of the clearing agents, P. W. 3, and Rahmatullah, also a clearing agent, P. W.

4. Four witnesses were produced on behalf of the defendants. They were Minocher Dinshaw, Manager of the Trans‑Oceanic Steamship Co., D. W. 1, Abdul Kadir, the Freight Manager of the agents of the Trans‑Oceanic Steamship Co., D. W. 2, Kassim Dada, the Resident Director of the Muhammadi Steamship Co. at Karachi, D. W. 3 and Kassim, son of Usman, Assistant to the Freight Incharge of Muhammadi Steamship Co., D. W.

4. The most important documents which were exhibited were: (1) the minutes of the meeting (Exh. 6/1) which was held in the Ministry of Commerce on the 14th of May 1952, and was attended by Dr. I. H. Usmani, Deputy Secretary (Commerce) as the Chairman, Mr. A. A. Said, Controller of Shipping Pakistan, Mr. M. A. Ghani, Under‑Secretary (Commerce); eight representatives of the ship‑owners‑and seven representatives of the Shippers; (ii) the notice (Exh. 6/2) dated the 20th of. May 1952, which was issued to the public as a result of the meeting (iii) the shipping orders issued by some of the Shipping Companies, for instance, Exhs. 7/23 and 7/24 and (iv) the bills of lading, for instance, Exhs. 8/2 and 8/3.

4. The background of facts, in brief, is that formerly Messrs Mackinnon Mackenzie used to charge freight from Karachi to Chittagong at the rate of Rs. 20 per ton. The defendant companies charged it at the rate of Rs. 46 and Rs. 48 per ton. The reason was that Messrs Mackinnon Mackenzie had certain facilities with respect to unloading the cargo at the Chittagong Port which enabled them to discharge it without unnecessary detention of their ships at the outer anchorage. Later on, the defendant‑companies raised the rate of the freight to Rs. 61 per ton and according to Kassim Dada, P. W. 3, this increase was meant partly to meet the expenses which were incurred by the shipping companies owing to the detention of ships at the outer anchorage at Chittagong. In spite of these increases the shipping companies, later on, recovered additional amounts from the shippers to meet the expenses incurred by them for using lighters and paying demarrage. The amounts were refundable if not utili sed. The ship‑owners therefore complained to the Government, with the result that the above‑mentioned meeting of the representatives of the Government, the ship‑owners and the shippers was convened. Exh. 6/2 contains a record of the proceedings of that meeting.

5. The stand taken by Mr. Cowasjee of the East and West Steamship Co. at the maeting is disclosed in the minutes as follows :‑ "Mr. Cowasjee stated the rate was based on the cost of main tenance of the trawlers 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 unloading:" The offer of the shippers was as follows: "The Shippers made the offer that they were prepared to pay 50%‑more than the actual working expenses of the lighters but Mr. Cowasjee was not prepared to agree to any reduction." No agreement was reached; therefore, the Chairman closed the meeting with the promise of looking into the matter. The Chairman then recorded a note on the 19th of May 1952, that the Controller of Shipping should announce, through a public notice, the names of .the ships and the tonnage, if any, that was allowed to be carried on them as commercial cargo, and that an announcement be also made‑ "(u) that the shipping companies have agreed to charge Rs. 61 (or whatever is the rate for commercial cargo) per ton; (b) that the shippers may arrange for their own lighterage or pay lighterage charges to the shipping company at the rate of Rs. 10 per ton provided the lighterage cargo is allowed to be unloaded by the Port authorities at Chittagong within 48 hours of lightering from the ships; (c) that any shipping company or their agents who resort to unethical business practices should be reported to the Controller of Shipping with Documentary evidence supporting allegations or complaints." Thereafter, the public notice, Exh. 6/2, dated the 20th of May 1952, was issued to the press containing the following material information:‑ "The shipping companies have agreed to charge freight at the rate of Rs. 61 per ton for commercial cargo. They have also agreed to charge Rs. 10 per ton for lighterage at the outer anchorage if the lighters are released within 48 hours and at the rate of Rs. 20 per ton if the lighters are not released within that period. If the shipping companies or their agents charge more than the above rates or discriminate against shippers by adopting unethical business practices, the shippers should bring their complaints to the notice of the undersigned through recognised Chambers of Commerce or Trade Associations." This notice was signed by Dr. I. H. Usmani as the Controller of Shipping, Pakistan.

6. After the notice, the shipping companies continued to recover Rs. 20 from the shippers but discontinued the practice of writing in the shipping orders or the bills of lading that the money was refundable. The amounts were shown by the shipping companies in the shipping orders as follows: "Rs. 20 per freight ton for lighterage and demurrage will be levied or in the bills of lading as follows: Rs. "Tons 25.3475 @ Rs. 61 per 20 cwts. 1,546‑3‑0 Rs. 20 per freight ton for lighterage and demurrage 507‑0‑0 Total 2,053‑3‑0" The above entries constituted the contracts and need a careful study.

7. The above facts and documents, we believe, fairly accurately provide the outline of the entire cases of the parties, because the allegation made on behalf of the plaintiffs that an arrangement was made after the public notice as a result of oral negotiations has been rightly disbelieved by the learned Single Judge. These appeals have been argued before us by counsel for the defendants‑appellants on the basis of the above‑mentioned documents and circumstances, and not on the basis of oral negotiations or oral contracts. Counsel for the parties agreed that the public notice, Exh. 6/2, which was issued by the Controller of Shipping did .not have the support of the Control of Shipping Act, 1947 .(which has been repealed by the Control of Shipping Ordinance, 1959), but was merely an administrative action. No provisions of law were discussed by counsel for the parties who, according to us, rightly presumed that the facts were to be interpreted against the background of the Contract Act; but references were made by them to the judgments given in Muhammadi Steamship Co. Ltd. v. Abdul Aziz Ali Muhammad (P L D 1959 Kar. 269) and Muhammadi Steamship Co. Ltd. v. Abdur Rehman Abdul Ghani (P L D 1961 Dacca 132) and to the meanings of the words `demurrage' and `damages' stated by Carver in his book, Carriage of Goods by Sea.

8. It is a matter of obvious judicial interest that conflicting interpretations have been given by Kaikaus, J. (now a Judge of the Supreme Court) at Karachi as a Judge of this Court while disposing of fourteen revision applications under the Small Causes Court Act and by a Division Bench of the High Court of East Pakistan at Dacca while deciding a First Appeal in cases whose facts were exactly the same as the facts of these appeals. Kaikaus, J. has held that the amounts were not refundable and the Division Bench has held that they were refundable.' The only material differences as compared with these appeals are two firstly, the difference between those revisions and the appeal on the one hand and these cases on the other hand is that the shippers, who were the plaintiffs in those cases too as in these cases, did not prove the minutes of the meeting, Exh. 6/1, and the public notice, Exh. 6/2. Secondly, the difference between these cases and the revisions decided by Kaikaus, J. is that there is no proof in these cases that Rs. 20 per ton were paid by any of the shippers after the pertinent ship "had left the Chittagong harbour" and when "it was well known to the parties that no expenses had been incurred" by the ship‑owners towards lighterage and demurrage. These differences relate to the proof of the surrounding circumstances which can help in coming to the conclusion as to whether the amounts paid towards lighterage and demurrage were refundable or not, but the actual contracts were made in the words that were used in the shipping orders and the bills of lading which words have been reproduced above in paragraph 6.

9. The difference in the views of Kaikaus, J. and the Division Bench has nothing to do with the proof of the minutes and the public notice because they were not before either of the two Courts. Moreover, counsel for the plaintiff‑appellants argued that the stand taken by Cowasjee which has been explained in the minutes, Exh. 6/1, was not binding on their clients because, firstly, he was not their accredited agent and has not been produced as a witness to be cross‑examined; secondly; no agreement was arrived at in the meeting in which that stand was taken. We may add that there is no proof of any other similar meeting or of an oral agreement between the ship owners and the shippers. The public notice, Exh. 6/2, contains an assertion that the ship‑owners had agreed, presumably with Government, to charge Rs. 10 and Rs. 20 as stated in it, but that agreement, even if it was made, was not the contract between the parties. According to the notice, the shippers could complain to the Government if the ship‑owners charged more than the announced agreement, but the former do not appear to have made any such complaint. Had they made such complaints, the exact nature of the agreement would have been ascertained while settling them. The terms of the announcement made by an outsider which are extraneous to the contracts of the parties, cannot be given much weight for interpreting the contracts made by the parties.

10. As to the payments made by some of the shippers after the pertinent ships had left the harbour, we may mention, with utmost respect, that while deciding fourteen revision applications by one judgment, Kaikaus, J. has used those payments as evidence against all the applicants, presumably, because those payments elucidated the nature of the transactions which were exactly the same in all the cases and different interpretations of precisely the same written contracts would have sounded unconvincing. But the additional difficulty in the way of the defendant‑appellants in these cases for using that fact is that there is nothing in the judgment of his Lordship to indicate that those who had made the payments were given an opportunity to explain as to why they did so. There might have been a misapprehension or some other factually cogent explanation for it.

11. If the views expressed above are correct, then the material facts before us are substantially the same as were before Kaikaus, J. and the Division Bench at Dacca. This places us in a rather difficult situation. With this realisation we proceed in all the respect that we can show to the very learned Judges, to examine the pleadings, the terms of the contracts, the evidence produced by the ship‑owners and the material circumstances, in the light of the observations made by the learned Judges and the submissions of counsel. Counsel for the parties have said nothing new in these appeals excepting for the criticism of Exhs. 6/1 and 6/2 to which reference has been made above.

12. The language of the contracts contained in the shipping orders, as well as in the bills of lading connects the payments of Rs. 20 per ton to lighterage and demurrage. In other words, the payments were made to meet the expenses of engaging lighters and to pay demurrage. These payments were separate from the freight although mentioned in the bills of lading along with the freight. The nature of the payments was also different from the freight. The latter was a permanent feature and the former temporary, depending on the exigency of undue detentions which were common at the time. Kassim Dada, D. W. 3, was questioned in this respect, and has explained as follows: "Q. What prevented you from raising the freight charge further instead of levying lighterage and demurrage charges? A. Generally, the shipping companies do not like to keep on changing the rate of freight. These extra charges were made so that at the moment this difficulty was removed, they could be discontinued without affecting the "Basic Freight Structure." Further: "We had (prepared) a break‑up of our expenses and thereafter started charging for lighterage and demurrage." The above statements not only confirm the first impression created by the contracts that there is a difference between the nature of freight and the amounts received towards lighterage and demurrage, but also the impression that there was a special purpose for the recovery of the amounts.

13. If the above impression or interpretation is correct, then prima facie the amounts of Rs. 20 per ton could be used for the specified purposes only. If they were not used for those purposes, then the ship‑owners were not to retain those amounts. Kaikaus, J. has expressed this feeling as follows:-- "At first sight it does appear to one that lighterage and demurrage refer only to expense which is to be incurred and if an amount was received by a ship‑owner as lighterage and demurrage he should refund whatever remained with him after meeting the expenses." In other words, the case of the shippers is prima facie correct. If it is so then the onus was on the ship‑owners to rebut it. But, as pointed out by Wahiduddin Ahmad, J., Kaikaus, J. has ultimately taken the contrary view because his Lordship "had to adopt a negative approach" as the shippers had produced no evidence in support of their stand in the cases decided by his Lordship and they were held to be responsible for not establishing their point of view. Kaikaus, J., has accordingly observed that:‑-- "The onus of the issues was on the plaintiffs‑respondents. It was their case that this amount was paid on the understand ing that it was to be refunded after deducting expenses incurred for lighterage and demurrage. They produced, however, no evidence whatsoever." Further: "There was thus a duty cast on the plaintiffs to lead evidence as to the understanding between the parties with respect to this sum and their failure to do so, particularly, when the onus of issues was on them, is a ground for an inference against them." There is no doubt that in the absence ‑of concrete proof, elementary reason 'and first impressions, though often correct, can become over‑laid with sophisticated considerations and the elementary reason can be crushed under the weight of those considerations once the latter have given a different direction to the mind.

14. We have the advantage of the above quoted statements made by Kassim Dada (D. W. 3), but the thought which weighed with Kaikaus, J. in his Lordship's "negative approach" was as follows: On the one hand the plaintiffs had not produced evidence in support of the alleged agreement that the amounts were refundable, and‑ "on the other hand the defendants led oral as well as documentary evidence which does support their case. They even produced the agents of the plaintiff's agent themselves and those agents instead of supp6rting the case of the plaintiffs simply stated that they had not settled the terms." Additionally (i) " . . . . . the amount (s) could very well have been paid as a lump sum towards meeting the expenses. Lighterage is an expense which the defendants may not have incurred if they chose to wait at the outer anchorage. Therefore, there could very well be an agreement between the parties that a sum was to be paid to the defendants on account of lighterage and it was left to them whether they use lighters or incur expense by standing in the outer anchorage." (ii) Even if the freight was raised to Rs. 61 "in view of the congestion in Chittagong Port", there was no evidence to disprove the stand that there was "further congestion after" this, and, therefore they (the ship‑owners) decided to charge Rs. 20 per freight ton extra. In any case, we are here concerned only with what was the actual contract between the parties and there are good reasons (not evidence?) for holding that the intention was to pay a lump sum in lieu of the expenses to be incurred for lighterage and demurrage." (iii) ". . . . . the intention with which they (the 'ship‑owners) made the charge in this form (of the contracts) is not material because I am only concerned with what the contract was between the parties. There was no attack on the legality of this contract before me. "(The argument becomes complete if we keep in mind that the contracts as alleged by the shippers were not proved by any positive evidence. produced by the shippers). (iv) The word used in the shipping orders (not in the bills of lading) is "levied". It could not mean "deposited". (v) If the understanding was that the amounts were refundable, then the conduct of the ship‑owners in accepting the loss caused to them by the detention of their ships and not using lighters would be inexplicable."

15. The above considerations disclose, if we may say so with respect, admirably well knit reasoning employed for reaching the' truth and was weighty in its context but, if we are right in taking the view in agreement with the above quoted feeling of Kaikaus, J. that prima facie the stand of the shippers was correct in view of the object of the recovery of the amounts, then the existence of the above‑mentioned possibilities, which formed the main consideration, do not appear to be sufficient to rebut their case because possibilities can be conceived in favour of both sides. Without, explicating the contrary possibilities we may mention that the use of the word "levied" with reference to a contracted rate was not very appropriate apart from its sense of the refundability or unrefundability of the amounts. Too much importance may, therefore, not be attached to its connotations. The Division Bench at Dacca appears to have been well impressed by the pure reason of the existence of a different object or purpose of the extra charge from the freight and like a shot reached the conclusion that‑ "The amounts paid as freight are clearly mentioned in the bills of lading. The purposes for which the additional amounts were taken are also clearly stated therein;" therefore, the non‑fulfilment of the declared purposes made the amounts that were charged for the specified purposes refundable.

16. We may add that this is the ordinary sense of the contracts. If this sense was intended to be eliminated then some expression clearly indicating their non‑refundability ought to have been used by the shipping companies in the contracts. Formerly, they used the word "refundable" but that practice was abandoned after the meeting. The word, to our minds, was unnecessary in the context, though it conveniently elucidated the situation. If the discontinuance of the use of that word has any connection with the meeting and the public notice, then its use ` was more unnecessary in the changed circumstances because the period of detention controlled, according to the notice, the amounts to which the shipping companies were entitled. But the stand of the shipping companies is that the amounts are unrefundable irrespective of whether their ships were detained or not and whether they incurred any expense towards lighterage and demurrage or not. It was argued on their behalf that they had calculated that additional twenty rupees per ton could meet their extra expenses of the unusual detentions of their ships which were common at that time and that they had charged as well as received those amounts; therefore, it was irrelevant as to what extra expenses they actually incurred. In other words, the argument was that the extra charge was a temporarily increased freight, though they had fought shy of saying so, perhaps because the Control of Shipping Act, 1947 was in force at that time and the Government could control shipping rates under section 6 of that Act. Let us recall here that the Shipping Controller had expressed the view in his note dated the 19th of May 1952, that it wild be an "unethical business practice" if 'the shipping companies charged more than Rs. 10 for 48 hours' delay in unloading the cargo from the lighters. Avoiding the use of the word "freight" the companies have set out the heads of extra expenditure as "lighterage and demurrage". Having done so they are bound by their word and cannot treat the extra charge as a part of the freight.

17. We respectfully take the view that the purpose of the charge having been declared in the contracts themselves, the onus was on the Shipping Companies to prove that the amounts which B were charged could be retained or appropriated by them for other purposes. We may note 'here that the plea of the ship‑owners is not that a part of the amounts so received by them has been utilised by them towards the declared purpose and that the charge having been made in a lump sum, they are not accountable for the rest. They admit that nothing has been spent by them towards the avowed object. There is of course some material on the record to come to the conclusion that a ship or two was detained at the outer anchorage, but there is nothing to indicate that the detention was owing to "further congestion" in addition to the congestion that was included in the permanently increased freight of Rs.

61. Moreover, we wish to emphasise that the declared purpose is not detention but lighterage and demurrage". If there was detention but nothing was paid for using lighters or meeting demurrage, it is, strictly speaking, outside the contracts. The purpose, if any, which existed behind the declared purpose is not material. What is material in this context is to see as to whether the contemplated expense for using lighters or demurrage was incurred owing to the detention of the ships, and it is admitted that neither any amount was paid by them for using lighters nor for paying demurrage of any kind. The suggestion that they must have undergone some extra expenses and suffered some loss owing to the detention of the ships, is irrelevant because the charge was not meant for meeting any kind 'of expenses or losses which they might incur in the bargain but for the fulfilment of the declared purposes only. If this distinction is over‑looked, then the extra charge and the freight will become one and the same thing which the extra charge was not.

18. We accordingly, with respect, agree with the overall conclusion of the learned Single Judge and dismiss the appeals with costs.

19. The above conclusion was announced at the close of the arguments on the 27th of February 1964. K.B.A. Appeals dismissed.