P L D 1968 Karachi 252 (PLP)

4. The parties tendered documentary as well as oral evidence at the trial of the Suit. The plaintiffs examined eight witnesses, namely, P. W.

1. A. C. D'Cruz, P. W.

2. Noor Muhammad, P. W. 3 Shaukat Mirza, P. W. 4 Mohammad, P. W. 5 Ghafoor Victor, P. W. 6 Umar, P. W.7 Ilyas Usman and P. W. 8 Muhammad Ashraf. The defendants examined D. W. 1 Nani Gopal Patel and D. W. 2, K. Anthony. After hearing the parties and considering the evidence in the case the decision of the issues is as under:

5. Issues Nos. 1 and 2.‑The defendant's learned Advocate Mr. S. M. Hassan, agreed that both these issues raised the same question, that is, whether the suit is barred by limitation and that issue No. 1 is, therefore, redundant. The learned Advocate accordingly dropped this issue and confined his arguments on the question of limitation to issue No. 2 oily. This argument, briefly stated, was that the goods were discharged at the Jetty at Chittagong on 24‑6‑193, but the plaint in the present suit was presented on 16th August 1965, that is, more than one year after the discharge of the goods; whereas, under Article III, clause (6) of the Carriage of Goods by Sea Act, the carrier is discharged from any liability in respect of loss of or damage to goods unless the suit is brought within one year after delivery of the goods. Referring to the decision of this Court in Newzealand Insurance Co. Ltd. v. United Oriental Steamship Co. (P L D 1962 Kar. 151) that Article III, clause 6, is a "local or special Law" within the meaning of section 29 (2) of the Limita tion Act, 1908, the learned Advocate urged that the suit is liable to be dismissed under section 3 of the Limitation Act, which is made applicable to the present suit by section 29 of this Act, and under which the court is required to dismiss every suit instituted, after the period of limitation prescribed therefore. With regard to the extension by the carriers of the period for bringing the suit under the "Gold Clause", Mr. Hassan's contention was that the limitation period cannot be extended by agreement between the parties unless the agreement is an acknowledgment within the meaning of section 19 of the Limitation Act. It was further urged that by reason of Article V of the Carriage of Goods by Sea Act, immunity from a suit brought after expiry of 12 months could be surrendered by the carrier only by endorsement on the Bill of Lading, and that this not being the case in the present suit, the extension of the period of limitation by Exhs. 8j 16 and 8/ 17 was not binding on the defendants.

6. In my opinion, this approach of Mr. S. M. Hassan to the question of limitation is not well conceived. The question has to be decided according to the rule laid down by their Lordships of the Supreme Court in Abdul Jalil Chowdhury v. Muhammadi Steamship Co. (P L D 1961 S C 340). The carrier is under duty to give delivery of the goods to the consignee in the order and condition in which the goods were received by the carrier, and if the goods are damaged on the voyage, the carrier is under the further duty to compensate the owner for damage to the goods, unless the damage is the result of an exempted peril or cause, either under the contract of carriage or under the relevant Law regulating the carrier s liability, which in the present case, is the Carriage of Goods by Sea Act, 1925. The time for delivery of the goods may be extended by agreement, express or implied, between the carrier and the consignee. Likewise, if the goods are damaged in transit, the carrier may admit liability for this damage and may agree to compensate the owner. This admission or agreement to compensate the damage, may also be either express or be implied from the circumstances of the case or the conduct of the parties. Both, in the case of extension of the date of delivery by agree ment, or agreement to compensate the damage, the cause of action of the consignee would be on the agreement, and the period of limitation may be computed either from the date of such agree ment or of the date when this agreement is broken or repudiated. This, I think, is the rule laid down in Abdul Jalil Chowdhury v. Muhammad! Steamship Co. Ltd. I would be better understood if here I may give a brief narration of the facts of this case. The goods in this case were shipped by the ship "Al‑Murtuza Ali", which reached Chittagong on 30th June 1950, and after discharg ing its cargo left the harbour on 16th July 1950. The carrier's agents refused to give the delivery order to the consignee, unless the letter produced a weighment certificate. This certificate could not be produced as the Superintendent of the Jetty took the stand that the consignments had not been landed. But the carrier's agents persisted in the assertion that "Al‑Murtuza Ali" did land the consignments in question, and accordingly refused to give delivery order unless weighment certificate was produced. There was no denial or repudiation by the carrier of the duty to deliver the goods to the consignee. Ultimately, the carrier's agents issued the requisite delivery order on 26th of October 1951, whereupon the Jetty Superintendent issued a short‑landing certificate. The consignee then filed a suit on 16th July 1952, that is, two years after the departure of the ship from the Chittagong Port. The carrier pleaded the bar of limitation on the ground that the suit should have been filed by 16th July 1951, that is, within one year from the date when the goods should have been delivered, as required by Article III, clause (6) of the Carriage of Goods by Sea Act. Their Lordships, however, held that there was an implied agreement between the parties to extend the date for the delivery of the goods. Referring to section 63 of the Contract Act, under which a promisee may extend the time for the performance of the promise, their Lordships observed that this extension should be with the consent of the promisor, which consent, however, may be either express or implied, and, likewise, the consent of the promisee also may be express or implied, and this fresh agreement would give rise to a fresh cause of action and there would be a fresh terminus a quo for limitation when the carrier failed to perform the fresh agreement. Their Lordships took note of the fact that the carrier never refused, nor ever expressed its, inability, to give the delivery and ultimately it issued a delivery order. No doubt, the decision of their Lordships was given in a case for damages for non‑delivery of goods, but the rule laid down in the case with regard to a fresh cause of action on a new, express or implied, agreement would equally apply to a case for compensation for damage to the goods, provided it can be found that the carrier expressly or impliedly agreed to compensate this damage.

7. Turning to the present case, it is to be noted that con signee, namely. Dawood Corporation Ltd., lodged its claim for compensation for damage to the goods on 13th March 1964 by Exh. 8/6. On 28th April 1964, the plaintiffs in suit, that is, the Central Insurance Co. Ltd., wrote Exh. 8/7 to the carrier's agents, forwarding therewith the letter of subrogation obtained from the consignee. This letter was replied by Exh. P/8, dated 7th May 1964, by the defendant No. 2, who stated that they were looking into this matter and would inform "the plaintiff within one week". On 16th June 1964, the defendant No. 2 wrote Exh. 8/15 inform ing the plaintiffs' lawyers that the claim had been referred to the principals, namely, the defendant No. 1 for decision. On 19th June 1964, the defendants sent telegram Exh. 8/16, and a letter Exh. 8/17, to the plaintiff's lawyers, by which the time for bringing the suit was extended by 12 months. By , further letters dated 28th July 1964 (Exh. 8/19) and 24th October 1964 (Exh. 8/23), the defendants No. 2 informed the plaintiffs that the matter had been referred to the Protection and Indemnity Club, the insurers of the ship and the cargo. Up to this stage, there was no denial or repudiation of the claim for compensation for damage to the goods. The impression left by this correspondence is that the defendants admitted that the goods did suffer damage in transit, and that the carrier was considering the question of settlement of the claim for compensation. The extension of time for bringing the suit and the reference by the defendants of the plaintiffs' claim to the P & I Club could be for no other purpose except that the defendants desired that the claim for compensation should be settled by the insurers, namely, the P & I Club. No occasion would have arisen for making a reference to the insurers, or even for extending the period for bringing the suit, unless the defendants thought that the plaintiffs were entitled to compensation for damage to the consignment. Thus, the inferences to be drawn from this conduct of the parties and the correspondence between them are (i) that the defendants impliedly admitted that the consignment in suit did suffer-damage in transit for which they were liable to pay compensation : (ii) the defendants required time to get a settlement of this claim from the insurers, the P & I Club, and (iii) the plaintiffs and the consignee, namely, Dawood Corporation Ltd., agreed to this extension by giving to the defendants further time of 12 months for settlement of the claim. This would constitute an implied agreement by which the carrier undertook to compensate the damage to the goods. I should fix the date of this agreement to be either 19th June 1964, when the defendants agreed by Exhs. 8/16 and 8/17 to the extension of time by 12 months for bringing the suit, or the 28th July 1964 when the defendants informed the plaintiffs by Exh. 8/19 that the claim for compensation of the damage to the goods had been referred to the P & I Club. Either of these two dates may be taken as the point for commencement of the implied agreement on the carrier's part to compensate the damage to the goods. This implied agreement gave a fresh cause of action to the plaintiffs, who can either claim specific enforcement of this agreement, in which case the period of limitation is three years from the date of the agreement, or sue the carrier for compensation for breach of this agreement within three years from the date of the breach. I have noted above that there was no denial or repudiation of the plaintiffs' claim for compensation. However, on 8th December 1964, the defendants wrote Exh. 8/25, in which they made a reservation as to their liability in the following words:‑ "This letter does not constitute and is not to be construed as an admission of liability under or extension of the terms of Bill of Lading‑or any act governing the carriage of goods covered by such Bill of Lading." This reservation was 'repeated in letters dated 29th December 1964 (Exh. 8/ 27) and 27th February 1965 (Exh. 8/29). The letter Exh. 8/25, dated 8th December 1964, may be treated as amount ing to denial or repudiation of the plaintiff's claim, in which case the plaintiff's could bring a suit for compensation within three years from this date, or the plaintiff's could bring a suit for specific enforcement of the agreement to compensate, the limitation period in which case would be three years from either 19th July or 28th July 1964. Thus, the present suit may be treated either as a suit for specific enforcement of this implied agreement, or for compensation for breach of this agreement. In either case, the suit would be within time as the plaint was presented in Court on 16th August 1965. In this view of the matter, which I would venture to say is a reasonable view consistent with .the conduct of the parties, the defendants' plea of limitation loses force. Accordingly, I would decide this issue against the defendants.

8. Issue No. 3.‑Under this issue, the defendants claimed exemption from liability for damage to the consignment by reason of the provision of Article IV (2) (c) and (d) of the Carriage of Goods by Sea Act, according to which the carrier is not responsi ble for damage arising or resulting from (i) perils, dangers and accidents of the seas or other navigable waters or (2) Act of God. No arguments were addressed by the defendants' learned Advocate, Mr. S. M. Hassan, on the second defence, that is, damage being caused by Act of God. The arguments were con fined to the defence that damage was caused by the perils of the sea. For this purpose, the defendants introduced two documents, Exh. 8/33, which is the note of protest made by the master of the vessel on arrival at Chittagong, and Exh. 8/35, which is the, Chief Officer's Log Book. No officer or other member of the crew of the vessel in question was examined by 'the defendants to prove this excepted peril. Nor did the learned Advocate for the defen dants place any reliance on the Log Book during his arguments. He rested the defendants' case, only on the statements made in the note of protest, Exh. 8,

133. The question for decision is whether the defendants have successfully proved that the damage to the goods was due to the perils of the sea. The phrase "perils of the sea" denotes accidents which are the peculiar, incidents of navigation in the seas. If peril has arisen from the weather encountered on the seas, then this expression would mean that the weather encountered was too much for a well‑found vessel to with stand. The burden of proving that damage has resulted from such peril is on the carrier (Carver on Carriage by Sea, 1963 Edition Vol. I, Article 154). Further, the question of determination of such peril is linked with the duties which the Carriage of Goods by Sea Act imposes on a carrier. I should in this connection refer to Article III (i) and Article IV (1) of this Act. Article III (i) is to the following effect :‑-- "The carrier shall be bound, before and at the beginning of the voyage, to exercise due deligence to‑

(a) make the ship seaworthy ; (b) properly man, equip, and supply the ship ; (c) make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation." Article IV (1) reads as follows :‑

"Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from un-seaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy, and to secure that the ship is properly manned, equipped and supplied, and to make the holds, refrigerating and cool chambers and all other' parts of the ship in which goods are carried "fit and safe for their reception, carriage and preservation in accordance with the provisions of paragraph 1 of Article III. "Whenever loss or damage has resulted from un-seaworthiness, the burden of proving the exercise of due diligence shall be on the carrier or other person claiming exemption under this section." Thus, the carrier is under an obligation to make the ship seaworthy. This obligation I understand to mean is that the ship should be prepared for the proposed voyage considering the season and the weather which may be encountered on the seas. The carrier should see that the ship is properly manned, equipped and supplied, its hatches are duly secured, and its holds, and other parts in which the goods are carried, are fit and safe. In other words, the ship should be prepared to meet the weather which is usually to be encountered on the particular voyage proposed to be taken. Accordingly, in all cases where the carrier pleads the excepted perils of the sea, the question which should be con sidered is whether the ship was reasonably fit to carry the cargo considering the season and waters to be traversed. Rough seas and heavy weather are to be expected on voyages between Karachi and Chittagong, and it is the duty of the carrier, both at the beginning, and during the voyage, to see that hatches are tightly secured and holds and all other parts of the ship in which goods are carried are fit and safe and that the ship has every equipment on board which would enable the crew to meet heavy weather and to protect the cargo. The connection of this duty of the carrier and the perils of the sea is discussed in the following words by W. Tetley in his book "Marine Cargo Claims" (1965 Edn.) at. page 118 which, in my opinion is the . correct legal position on this point. "The question of peril of the sea is bound up with due diligence to make the vessel seaworthy for the voyage in question. This is made clear in The Silvia, where Gray, J., declared that the test of seaworthiness is whether the ship is 'reasonably fit to carry the cargo which she has undertaken to transport', to which Knauth has added appropriately, `con sidering the season and waters to be traversed'. For example, hatches must be especially tightly secured and cargo carefully stowed for a voyage in the North Atlantic in winter because gales and very rough seas are to be expected. If hatches leap or cargo breaks loose under such conditions, one can conclude that the vessel was not seaworthy and there was no peril." In connection with the question of .the peril of the sea, a further question which has to be examined is whether, if storm is encoun tered, the vessel could not reduce speed and heading into the wind, which would reduce buffeting, and avoid damage to the cargo, though this course may involve delay in the voyage. Therefore, if sea water enters the holds and causes damage to the goods, the carrier must show that the ship was properly prepared to meet heavy weather and that due diligence was exercised in making the ship seaworthy and the holds safe for transport of the goods considering the season and the waters to be traversed. The carrier must also show that buffeting was reduced by reducing the speed of the ship or heading it into the wind.

9. In the present case, the sole reliance for the excepted peril of the sea is placed on Exh. 8/33, which contains the master's statement that the ship "encountered very rough seas, boisterous weather rolling and pitching on 15‑5‑1963 in the South coast of Ceylon and further the Captain encountered unprecedented cyclonic storm Hurricane wind force, Tidal waves heavy rain squalls' Typhoon, bent on wanton destruction around, snapped anchors, cut ship adrift and a trial of devastation all round, resulting from the deep depression in the Bay of Bengal, the vessel rolling, pitching, labouring and strained very heavily. Sea water flooded tile Deck fore and aft on the 28th/29th May 1963. The master took all necessary precautions to safeguard his vessel. All hatches and vents were covered and battened". This con dition of the sea and weather is nothing unusual on voyages between Karachi and Chittagong, and a ship' should be equipped, manned and secured and its hatches and holds properly made tit and safe in the expectation that weather of this nature may be met on the voyage. But the carrier' has nor led any evidence to show that the, ship was properly prepared for such weather. The damage to the goods by contact with sea water may possibly be due to the absence of due diligence, on the carrier's part in pre paring the ship for such weather, in which case the dominant cause of the damage would be the carrier's failure to properly prepare the ship to meet heavy weather on the voyage, and not the storm encountered by the vessel. Even if the master's state ment in the protest note is believed that he covered and battened all the hatches, the questions still remain to be answered whether the hatches were properly secured and made safe at the beginning of the voyage to meet the heavy whether which should be expected on these voyages, and whether the ship had sufficient equipment to meet this contingency. On these points, the carrier has failed to lead any evidence. There is also no evidence whether the master of the vessel ever reduced the Weed of the ship and headed it into the winds so as to avoid damage to the cargo. If the master avoided taking this course, the damage to the goods should be ascribed to an error in navigation and not to the perils of the sea.

10. In my opinion the carrier has even failed to prove that the ship encountered any such perils of the sea as are stated in the protest note, Exh. 8/33. The master of the ship was not examined, nor any other officer or member of the crew of the vessel. Mr. S. M. Hassan, the learned Advocate for the defen dants, however, urged that the protest note, Exh. 8/33, being a document included in Part I of the Schedule to the Commercial Documents Evidence Act (XXX of 1939), I should presume that this protest was duly made by the master of the vessel, and that the statements contained therein are accurate. The carrier should be deemed to have discharged the onus of proving that the vessel encountered heavy weather and storm, resulting in the damage to the goods, by production of the protest note itself. I would accept this proposition and I would draw the 'presumption that the statements contained in the protest note are accurate, provided the protest note itself is produced in Court. Exh. 8/33 is not the original protest, but only a copy, and the Commercial Documents Evidence Act, 1939, does not require me to presume the correctness of the statements contained in a document which merely purports to be a copy of the Note of Protest. No such presumption as is required to be made by the Court under section 3 of the Commercial Document Evidence Act, 1939, can be made from the copy of a document. The carrier should have produced the original protest to be entitled to the benefit of this presumption, but having failed to do so, I would hold that the carrier has failed to prove that the vessel s.s "Dacca City" encountered any such seas or weather as would constitute perils of the sea. For this reason, 1 would decide issue No. 3 against the carrier.

11. Issues Nos. 4 and S.‑These issues were raised at the defendants' instance, whose learned Advocate, however, stated in the course of the arguments that he would not press these issues.

12. Issue No. 6.‑Under this issue, the defendants' case is that only 54 bales of cotton piece goods have been proved to have suffered damage by contact with sea water, and that there is no satisfactory evidence‑of similar damage to the remaining 96 bales. This contention is based on Exh. 6/1‑A and Exh. 10/5, which are the reports of the joint survey carried out by the carrier's sur veyors, M/s. Eastern Superintending Co., and the surveyors of the consignee, Messrs Joseph Lobo & Co., at the Jetty on 26‑6‑1963 and 1‑7‑1983. According to this survey, only 54 bales were found to be damaged by sea water. The goods were removed after this joint survey to the consignee's godown, where a second survey was held by Joseph Lobo & Co., on the consignee's request, on 2nd, 3rd and 10th July 1963. The report of this second survey is Exh. 12/1, according to which the remaining 96 bales were dam aged by sea water. The defendants, however, refused to accept this report, and, in my opinion, rightly, as neither it was a joint survey, nor notice of this survey was sent to the carrier's agents, namely, the defendants No.

2. This second survey should have been carried out in the presence of the carrier or after notice to it, and since this course was not followed, the carrier should not be held to be bound by this report without further corroborating evidence. The defendants explained the necessity of the second survey by stating, that 96 bales were not found to be apparently damaged at the Jetty, and according to the practice followed by the Chittagong Port Trust, it is only goods the apparent condition of which shows damage which are allowed to be surveyed at the Jetty. According to defendants, damage to the 96 bales was discovered when these bales were opened in the consignee's godown, and therefore, the second survey was carried out. But no satisfactory explanation has been given as to why notice of this second survey was not given to the carrier. The defendants should have brought further evidence to show damage to the 96 bales, such as evidence of sales below invoice price. But they failed to do so. They failed to produce their account books to show that 96 bales were sold below the invoice price, P. W. Noor Muhammad, an employee of the consignees, namely, Dawood Corporation Ltd., when examined on commission at Chittagong, deposed that the account books had been sent to the Head Office of Dawood Corporation Ltd. at Karachi. An employee of the Head Office of Dawood Corporation Ltd. at Karachi was exami ned. He is P. W. Ilyas Osman, who, whoever, stated that the account books were not traceable. I would, therefore, decline to bind the defendants with the second 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 the evidence of account books, showing sale below invoice price. The report of the first survey, however, is binding on the carrier, because it was a joint survey. According to this survey, 54 bales were damaged by contact with sea water to the extent stated in the report. The finding under this issue is that damage to 54 bales is not post -discharge, and further, it has not been proved that the remaining 96 bales were damaged on the voyage between Karachi and Chittagong.

13. Issue No. 7.‑In view of the conclusions under issues Nos. 2, 3 and 6, the carrier is liable to compensate the plaintiffs for damage to 54 bales of cotton piece goods shipped from Karachi aboard s.s. "Dacca City". The particulars and extent of this damage are given in the reports of joint survey, Exh. 6/1‑A and 10/5. The invoice value of the whole consignment being Rs. 1,68,250, the damage to 54 bales is assessed at Rs. 18,161 ,00 (Rupees eighteen thousand one hundred sixty‑one), according to the calculations carried out by the plaintiff's on the basis of the survey reports. The defendants have not challenged these calculations, nor have they led any evidence to rebut this assess ment of damage. The finding under issue No. 7 is that the plaintiffs are entitled to receive Rs. 18,161,00 (Rupees eighteen thousand one hundred sixty‑one) as damages.

14. Issue No. 8.‑The objection that the defendant No.2 has been improperly joined is upheld. These defendants acted as agents of defendant No. I, who have their registered Office at Karachi. But the defendant No. 2 has not made out any case for special costs. This issue is decided accordingly.

15. In the result, there will be a decree against defendant No. 1 only for Rs. 18,161‑00 (Rupees Eighteen thousand one hundred sixty‑one) with interest thereon at six per cent. per annum from 24th June 1963 when s.s. "Dacca City" discharged its cargo, including the consignment in suit, at Chittagong, up to the date of payment, with proportionate costs. The suit against the defendant No. 2 is dismissed but with no order as to costs. A. H. Order accordingly.