P L D 1993 Karachi 533 (PLP)

The case of the plaintiff Insurance Corporation, as per averments made in the plaint, is as follows: The Shippers at Middlesborough, after insuring it with the plaintiff Insurance Company, sent a consignment of 1108 bales of synthetic fibre weighing 1,99,828 kgs. to M/s. Karim Cotton Mills Limited (consignee) and to the order. of Habib Bank Foreign Exchange Branch, Karachi and through the carriers M/s. P & 0 and, B.I. Cunafd Brocklcbank Shipping Company (defendant No.1) vidc Bill of Lading No.37M issued by defendant No.1 through their agent at Middlesbourough (defendant No.2 is their agent at Karachi) and the consignment was loaded on defendant NoYs vessel "ni.v. Strathinch". Subsequent to the arrival of the vessel at Karachi on or about 17th August 1979 the consignment was discharged at Karachi in the care and custody of Karachi Port Trust (defendant No.3) as statutory bailee. The consignment was not discharged directly on land but on a lighter/barge No.571 and when it was still on the barge, it caught rife and about 312 bales were burnt. Eventually, the consignment was discharged on or about 20th August 1976 at Birth No.17 of East Wharf, which was open space. The consignees asked the plaintiff and defendants Nos.1 and 2 to survey the damaged consignment and M/s. Republican Surveyors and M/s. Shoukat Ali and Company Surveyors jointly acted on behalf of the plaintiffs and the consignees whereas M/s. Joseph Lobo Surveyors acted on bchalf.of defendants Nos.l. and

2. Survey operation. commenced on 25th August and continued for a few days. Both the survey teams prepared separate survey reports but they agreed that the following damage was caused:-- 1. 247 Bales:???? found fire/water affected. Average allowance assessed for depreciation 65%. 2. 065 Bales:???? Found water-affected. Average allowance assessed for depreciation 40%. On the basis of the above findings of the two teams of the surveyors, the loss of the consignees was assessed at Rs-3,59,425.48 which the plaintiff insurance company had to pay against a letter of. subrogation. Thereafter, the plaintiffs lodged claim with the carriers and their agents (defendants Nos.1 and 2) vide letter of 17-11-1976. The claim was, however, lodged for Rs.2,93,889.33 and not Rs.3,59,425.48. The plaint does not explain this difference. Defendants Nos.l. and 2, however, repudiate their I iability vide their reply dated 25th November 1976 on the ground that they were not responsible under Carriage of Goods by Sea Act for damage caused. by fire and, further, because the damage was not caused on their vessel but on the lighter/barge. The plaintiffs then served a notice under section 87, K.P.T. Act upon the K.P.T. (defendant No,l) but it was not replied. (It was later replied two weeks after filing the suit). Hence the suit.

2. The defence of the K.P.T. is short and simple. The barge was owned ???????? or managed by defendant No.2 and the consignment had never been in the custody of K.P.T., nor it was a party to any survey. They replied to the notice on 19-2-1977 but by that time suit had already been riled. They maintained that they were not liable to, compensate any party for the damage.

3. In the joint written statement, defendants Nos.1 and 2 claimed that the moment the consignment was, discharged 'from the' vessel into the lighter/barge, their liability as carriers came to an end. (They, however,, did not clarify whose responsibility, and under what law, agreement or usage, commented from that point of time.) It was, however, admitted that they had commissioned M,~-;. Joseph Lobo Surveyor to assess the damage. They, however, evaded the result of the survey report. They denied that the loss was to the tune of Rs.3,59,425.48 and they also denied that the plaintiff insurance company had compensated the consignees. They also claimed that the fire was caused accidentally and not due to their negligence and that fire alone was not responsible for the damage and that rains of 22nd, 24th, 27th, 30th and 31st August also added to the enormity-of damage as the consignment was lying in the open at Berth No.17.

4. On the above pleadings the following issues were framed by the Court:-- (1)??? Whether the defendant No.1 committed breach of the terms of the Contract of Affreightment or of their statutory duties in respect of the carriage of 1108 bales from Middlesborougb to Karachi. (2)??? Whether the defendants Nos.1 and 2 arc exempt from liability for the loss caused to 312 bales by fire in the barge in which the same were lying. Whether the damage caused to the: 312 bales by fire in the barge was due to want of due care on the part of the defendants Nos.1 and

2. What was the extent of loss/damage caused to 312 bales by fire and by water. (5) 'Are the defendant No.2 personally liable for the alleged loss. (6)??? Were the defendant No.3 Bailecs of the goods in suit. (7)??? What is the amount of loss suffered by the consignee of 312 bales and ?????????? from whom arc they or the plaintiff, as subrogee, entitled to claim. (8)??? Whether the damaged goods were removed under the authority and ?????????? responsibility of defendants Nos.1 and

2. If so what is the effect? 5.?????????????? The plaintiffs examined P.W.1 Sarwat Ali Exh.6, a representative of a Surveyor Company 'Shoukat Ali & Company. He had carried out the survey and he produced his Survey Report as Exh.6/1-He also produced another Survey Report Exh.6/2. Next witness P.W.2 Najmul Hasan is also a surveyor of another -surveyor-firni.M/s. Republican Surveyors. He proved his signatures on Exh.6/2. P.W.3 Noor Muhammad Exh.8 is an employee of plaintiff insurance company who produced a number of documents and proved the case of the plaintiffs. Defendants Nos.1 and 2 examined Sardar Muhammad Amin Khan D.W.1, an employee of defendant No.2. He claimed in his affidavit-in-evidcnce to have produced in evidence Delivery order issued by defendant No.2 to Kim Limited Karachi, the final endorsee of Bill of Lading, but the document was, in fact, not produced. He denied that the loss suffered by the consignee M/s. Karim Silk MilIs was to the tune of Rs.3,58,425.48 but he did not disclose what was the value of the damage even though his company had also. appointed surveyors to assess the damage. He also disowned the liability of defendants Nos.1 and 2 to compensate the plaintiff as subrogatee but did not say whether the K.P.T. or some other agency was liable for the damage or whether the plaintiff must themselves bear the loss. He also produced two letters dated ~19-10-1976 and 21-10-1976 (Exh.9/2 and Exh.9/3), the one from M/s. Kim Limited to defendant No.2 and the other its reply. The only other witness of defendants Nos.1 and 2 is D.W.2 Dawood, an ex-employee of M/s. Asmin & Company which had hired Barge No.571 for defendant No.2. The K.P.T. (defendant No.3) has examined its employee Muhammad Tahir as D.W.3 as its only witness who deposed that at no time was the consignment in the custody of K.P.T. nor it was not associated in any survey exercise to assess the damage and, therefore, K.P.T. was not responsible for the loss.

6. Learned counsel of the parties have been heard. My findings arc as follows

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7. ISSUES NOS. I TO 3: It is an admitted position that Bill of Lading Exh.8/2 was issued by defendant No.1 and it was acted upon by defendant? No.2 (per para. 2 of affidavit-in-cvidcncc; of D.W.1 Sardar Muhammad Amin Khan). This bill of lading constitutes the contract between the shippers and the carriers,. It was the contractual as well as statutory duty of the carriers to deliver the consignment ' to the consignee at Karachi in good condition. However, defendants Nos.1 and 2 claimed that the moment the consignment was discharged from the vessel into the lighter/barge, their liability as carriers came to an end. They rely on clauses 16 and 18 of the Bill of Lading (Exh.8/2). These clauses arc quoted below:-- "16.??????? Discharge and deliver .

The vessel may commence discharging on arrival without notice to the consignee, and may discharge continuously, with or without sorting the goods or separating them from other goods (whether or not such other goods are in the same ownership), irrespective of weather by day and by night, Sunday and holiday included, any custom of the port to the contrary notwithstanding, on to quay, or into shed, warehouse, depot, hulk, lighter or any other premises, vehicle, vessel of craft as the carrier of his agent may determine. Such discharge shall constitute due delivery of the goods (whether in expense in connection with storage on shore or on Board for any purpose whatsoever, including any charges or payment of such charges or expenses by carrier shall for the purpose of this clause be final and binding upon the consignees. Delivery over? side to consignc's lighters is at the vessel's option and if given, is subject to the consignee providing sufficient lighters and merit to -receive the goods as fast as the vessel can deliver, any custom of the ?? Port to the contrary notwithstanding. Whether the vessel tackles or ????????????????? shore cranes or other means be employed in the course of delivery on ????????????????? to quay or otherwise, any loss of, or damage or injury to the goods, ????????????????? lighter or mcnt employed directly or indirectly by the consignee shall, ????????????????? after the end of the Hague Rules period, be at the sole risk in every ????????????????? respect whatsoever of the consignee. The carrier, his agent and ????????????????? servants shall not under by circumstances whatever be under the ????????????????? liability for insufficient packing or inaccuracies, obilteration or ????????????????? absence of marks, numbers, addresses or descriptions, not for delivery to drop marks, or quality marks or counter-marks or numbers, nor for failure to notify the consignee of the arrival of the goods, any custom of the port to the contrary notwithstanding. 18.?? Landing: Landing charges.,--Tbc'goods shall in all cases, if the carrier so wishes, be landed by the vessel, and notby the consignee, and the. landing charges together with sorting charges, if any, shall be payable by the consignee against the delivery. Lighterage, if any, of at port of discharge, to be paid in the consignee of the goods, any custom hall or alleged custom of the port to the contrary notwithstanding."

8. The abovc-quoted clauses 16 and 18 are not ambiguous. They clearly provide that as soon as the consignment is transferred from the vessel into, amongst other places and vessels, lighter or hulk, such transfer/discharge shall be considered "due delivery" of the consignment. No doubt the lighter/ Barge No.571, belonging to Nasccr Ahmad & Co., was hired by defendant No.2 through M/s. Asmin and Co., for trans-shipment of the cargo from the vessel to the shore, as is evident from the evidence of D.W.2 Dawood, the delivery is complete in terms of the Bill of Lading. The consignments, however, remained in the barge for nearly a week aind during this period it was in the custody of defendant No.2 which cannot escape liability for the damage during this period. However, in this re ard I was referred to clause (b) of Rule 2 of Article IV of 19 the Schedule of Carriage of Goods by Sea Act which provides that neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from fire, unless the fire is caused by the actual fault or privily of the 'carrier which means that defendant No.2 shall be responsible for the damage only if the fire was the result of their actual fault.or, privily. Learned counsel of the plaintiff pointed out that clause 2 of Article III enjoins upon a carrier to properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried but this reference was not relevant because per clause 16 of the Bill of Lading the "discharge" of cargo stood completed on the transfer of the cargo to the barge. 9. in short, I am of the view that the carriers, specially their Agents, defendant No.2., can be responsible for the damage only if it were shown that the fire wa's~ due to, their fault as per clause (b), Rule 2, AriOq IV of the Schedule to the Act. Learned counsel of the plaintiffs claimed that onus to prove that they were not at fault lay on the defendants. I do not agree with the learned counsel. Onus to prove the fault'of the defendants must lie on the plaintiffs and when it was pointed out to' learned counsel of the plaintiff, he claimed that the plaintiff, had discharged this onus by producing the following documents:-- (1)?????????? Joint Survey Report by M/s. Shoukat Ali & Co. and Republican ????????????????? Surveyors

Exh.6/1. (2)??? Joint letter of the above two Survey Companies

Exh.6/2- (3)??? Forwarding letter of Insurance Association of Pakistan

E xh.8/X. 1993??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? New Jubilee Insurance Co. Ltd. v.???????????????? Karachi 539 ? P&O and B.I. Cunard Brocklebank Ship. Co. (Salahuddin Mirza, J) (4)???????????????????????????????????????????????????????????????????? Fire Report of K.P.T.

Exh.8/26-A.

10. The first three documents do not throw any light on the fault of th defendants. However, the Fire Report makes the following relevan observations:-- (1)??? The cargo was loaded very tightly on the barge leaving no space for ?????????? firc-fighting operation. (2)????????? Spontaneous cumbustion was ruled out as the cause of fire. (3)??? Throwing of a cigarette butt or sparks from nearby ships' funnel were ?????????? most likely causes of fire.

11. These three observations in Exh.8/26-A do not make out a case of negligence or "fault" on the part of dcfendan(s Nos.1 and

2. Loading the cargo tightly so as not to leave any spaccTor fire-fighting operations is no negligence or fault. A burning cigarette carelessly thrown by a smoker or a spark from a nearby ship's funnel were listed as most likely cause of fire but defendants Nos.1 and 2 cannot be blamed for these causes on the strength of the evidence on the record.

12. Learned counsel of the plaintiff argued that defendants Nos.1 and 2 should have examincd the Master or Chief Officer of their ship to rebut the evidence of Exh.6/1, Exh.6/2, Exh.8/26 and Exh.8/26-A. As I have already stated abvoc, only Exh.8/26-A (the Fire Report of K.P.T.) has any relevancy to the issue under discussion but even this does not prove the negligence or fault of defendants Nos.1 and

2. In any case the Master or Chief Officer of m.v. Strathinch would not have thrown any light on the issue for the simple reason that the cargo bad not suffered any damage while on board the ship and these officers had nothing to do with the consignment after it had been unloaded from the ship. As would appear from the evidence of D.W.1 Sardar Muhammad Amin, the ship had already left the Karachi harbour when the bargc~ had caught fire. 1~.?????????? Learned counsel of the plaintiff bad cited the following judgments in A support of his arguments:-- (1)??????????? East and West Steamship Company v. Hossain Brothers etc., PLD ?????????????????? 1968 SC 15. (2)?????????? Federation of Pakistan v. Shaikh Fazal Karim PLD 1954 Lahore 245. (3)??????????? M/s. Abdul Rahman Abdul Ghani v. M/s. United Oriental Seamsbip ?????????????????? Co. PLD 1959 Dacca

536. The aforementioned first judgment lays down that any clause in the bill of lading exempting shipowners from liability for loss or damage cannot exonerate them from liability for negligence in discharging cargo in view of Article 111, Rules 2 and 8 and Articlp IV and such clauses would also be null and void by reason of Article III and that exceptions mentioned in Article IV do not cover a case of failure to discharge goods properly and carefully. So it is and there is no dispute with this proposition oi law but I have already concluded that the evidence on record has not shown negligence of defendants Nos.1 and 2 and, therefore, this judgment is of no avail to the plaintiff. The same view is held by the second judgment. The third judgment holds that the position of a carrier is that of -a bailcc and, therefore, onus lies on him to prove that reasonable care had been taken by it in handling the goods entrusted to it. I am of the view that defendants Nos.1 and 2 have discharged this onus.. it appears from the trend of cross-examination of D.W.1 Sardar Muhammad Amin that- the plaintiff considered it negligence of defendants Nos.1 and 2 thdt they c6untcnanced the discharge of consignment through barge rather than at the berth. However, defendants Nos.1 and 2 had no -opfion. It is the usual practice at Karachi harbour, of which judicial notice can be taken, that when K.P.T. cannot provide a berth to a ship, it discharges its cargo through lighter barges. Adoption of this practice by defendants Nos.1 and 2 does not amount to negi I igcnce or "fault". If the consignment had fallen into the sea or been otherwise damaged while under transfer from the vessel to the barge or while under movement in the barge, Defendants Nos.1 and 2's liability could have arisen but here the fire broke out when the consignment was lying securely wrapped in the barge. It goes without saying that it was against the pecuniary interest of defendants Nos.1 and 2 themselves to keep the consignment in the barge since they had been paying hiring charges for the barge but they were keeping the consignment in the barge due to force of circumstances as the k.P.T. had fa, Ied to provide any shed to them to unload the consignment from the barge. I have carefully gone through the cross-examination of D.W.1 Sardar Muhammad Amin but do not find any incriminating piece of evidence which could suggest the negligence of defendants Nos.l. and 2.

14. In view of the above discussion Issues Nos, and 3 are decided in the negative and Issue No.2 is decided in the affirmative '

15. ISSUE NoA What was the extent of loss/damage caused'to 312 bales by fire and by water. P.W.1 Sarwat Ali (Exh.6) is a Surveyor wh * o is sole proprietor of survey firm "Shoukat Ali & Co.'. He had carried out the survey of the 312 bales which were lying at open berth No.17 East Wharf. It was a joint survey conducted by P.W.1 Sarwat Ali on behlaf of the plaintiff insurance company as subrogee, by P.W.2 Najmul Hasan, another surveyor and sole proprietor of M/s. Republican Surveyors, also on behalf of the plaintiff and M/s. Joseph Lobo Surveyors on behalf of the Carriers. These bales were found badly firc-burncd. They were also found water-affacted because water was used for extinguishing fire. The survey was conducted from 25th August to 4th October 1976, the incident of fire having taken place on 20th August. He produced two survey reports. The I I I B 1WJ iNewitionvu MbUlallk;V %-V. AL-. W. P&O and B.I. Cunard Brocklebank Ship. Co. (Salahuddin Mirza, J) first Exh.6/1 is by the two surveyors commissioned by the plaintiff

M/s. Republican Surveyors and M/s. Shoukat Ali & Co. Surveyors ??????????????????? whereas the second (Exh.6/2) is also by the same two surveyors but appended to it as Annexure '2' is the joint survey report. of all the three surveyors. It is the unanimous finding of the surveyors of the plaintiffs and defendants Nos.1 and 2 and is quoted below:-- "Survey of abovementioned 312 bales 'Synthetic Fibre' was jointly conducted by the Undersigned on 28th August, 1976 and frequently thereafter till 4 th October, 1976 and findings agreed are as follows: Number of bales Fire JWatcr affected 247 Bales Number of Bales Water affected 65 Bales Damage Depreciation Allowance 65% Depreciation Allowance 40 %." Thus according to this joint finding of three surveyors, representing the plaintiff as well as defendants Nos.1 and 2, 247 bales were damaged by fire as well as by water which was used to extinguish it and the calculated depreciation allowance was 65% whereas 65 bales were only affected by water and depreciation allowance in their respect was assessea at 40%. P.W.2 Najmul Hasan of M/s. Republican Surveyors had also conducted this joint survey. The defendants have not challenged or contested the evidence of these two witnesses in so far as question of damage is concerned. It is an admitted position that M/s. Joseph Lobo were appointed as Surveyors by defendant No.2 and D.W.1 Sardar'Muhammad Amin Khan of defendant No.2 also conceded in his cross-examination that M/s. Peninsular and Oriental Navigation Company (Lloyds Surveyors) were also commissioned by defendants Nos.1 and 2 to carry out the survey and he admitted Exh.8/8 to be the report of Peninsular and Oriental Steam Navigation Company. This Exh.8/8 is based on the report of M/s. Joseph Lobo Surveyors which had been engaged to carry out the actual survey and this Exh.8/8 is actually a reproduction of Annexure '2' to Exh.6/2. The damage and depreciation allowance of 65% in respect of 247 bales and 40% in respect of 65 bales is thus a proved as well as an admitted fact. ???????

16. Exh.8/18 (Exh.8/23 is also the same document) is the "Claim Bill" of t . he plaintiff dated 17th November 1976 which was submitted to defendants I and 2. it contains the formula under which the damage as assessed by the Surveyors was converted into money at the then prevalent rate of 542 Karachi ??????????????????? All Pakistan Legal Decisions Vol. XLV S I= Rs.17.60 and which comes to Rs.2,93,889.33. It was rejected hy defendants Nos.1 and 2 vide their letter dated 25th November 1976 Exh.8/19 on the ground that they were not liable to damage by fire under Carriage of Goods by Sea Act. The valuation of the damage at Rs. 2,93,889.33 was not denied or contested. It was also not contested when P.W. 3 Mr. Noor Muhammad of plaintiff-company was cross-examined as no question was put to him in this regard. D.W.1 Sardar Muhammad Amin Khan of defendant No. 2 made a bald statement in para.7 of his affidavit-in-evidence denying valuation of loss at Rs.3,58,425.48 as assessed by the consignees vide Exh.8/15 but did not give the estimate of loss according to defendants Nos.1 and

2. The plaintiffs have claimed a lesser amount as per their calculations vide Exh.8/18. Learned counsel of defendants Nos.1 and 2 also did not contest this valuation of damage during the course of hearing. Under the circumstances, I have no hesitation in accepting the valuation of the damage caused to the 312 bales or depreciation of their value at Rs.2,93,889.33 per Exh.8/18. In short, I would hold ;that depreciation allowance on 247 bales was rightly assessed at 65% and on 65?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? 21 bales at 40% which, in terms of money, amounted to Rs.2,93,889.33 on the basis of the then prevailing exchange rate of L 1'=Rs.17.60. The issue is decided accordingly.

17. ISSUE NO.5: An agent of the carrier is also answerable for any short 1 delivery of the consignment or damage to it although his liability is co-extensive with the carrier and not independent of it -as held in the case of M/s. Crescent Sugar Mills and Distillery Limited v. M/s. American Export Isbrandt Sen Insurance and 2 others PLD 1983 Karachi 29 and as held in PLD 1975 Karachi 194) (Burjorjee Cowasjee & Co. v. Habib Insurance Co. Limited, C Karachi) an agent alone may not be sued unless the carrier is also joined as a defendant but this aspect is only academic since the carriers have been joined as defendants. If the negligence of the carriers or agents is proved, both of them are jointly and severally liable. Learned counsel of defendants Nos.1 and 2 did not dilate upon this issue. The issue is decided in the above terms.

18. ISSUE NO.6: Since it was alleged by defendants Nos.1 and 2 that the cargo was damaged while in the barge and not on board the vessel, and since the K.P.T. had not responded to the notice of the plaintiff dated 15th December 1976 (Exh.8/20) calling 'Upon them (K.P.T.) to furnish certain information, the plaintiff had also impleaded the K.P.T. as defendant No.3. However, after the suit was filed on 2-2-1977, the K.P.T. replied the notice through their counsel vide reply dated 19-12-1977 Exh.8/24 in which they clarified that the barge did not belong to K.P.T. and at no point of time the K.P.T. got custody of the consignment as bailee. P.W. 3 Noor Muhammad admitted in his cross-examination that the consignment was not in the custody of the K.P.T. when it was damaged. In view of this position learned counsel of Town Cooperative Housing society Limited (saiahuddin Mirza, i) the plaintiff conceded tha decided in the negative-

19. ISSUE NO.7: The quantum of damage has already been determined under issue No.4. it would appear that the plaintiff insurance company could have recovered the loss from defendants Nos.1 and 2 if the negligence of defendants Nos.1 and 2 had been proved but since it has not been proved I am afraid the plaintiff-company shall have to bear the loss. The issue is decided accordingly. the KPT are not the bailee. The issue is accordingly

20. ISSUE NO.8: Whether the damaged goods were removed under the authority and responsibility of defendants Nos.1 and

2. If so, what is the effcct. 20-A.: None of the witnesses of the plaintiff, even P.W.3 Noor Muhammad, has said anything which may reflect on this issue. Nor learned counsel of the plaintiff addressed the Court on this issue. Under these circumstances, the issue is decided in the negative. RELIEF.

In view of the findings under Issues Nos.1, 2 and 3, the suit is dismissed. The p*arties are, however, left to bear their own costs. A.A./N-470/K