P L D 1977 Karachi 765 (PLP)

3. In Suit No. 436/75 Messrs Saeed Industries and others of Pakistan imported machinery from China which was shipped on board the vessel 'Catherine S' for Karachi. When the goods reached Karachi it was found by the clearing and forwarding agents of the consignee that part of the goods were damaged. A joint survey was arranged which confirmed the damage. The goods were insured by the plaintiff with whom claim was lodged which was settled and the rights subrogated to the plaintiff. There upon the plaintiff brought the present suit for recovery of amount paid by it to the consignee against defendant No. I as the owner, Defen dant No. 1, as the owner/chatterer/operator of the vessel and defendant No. 3 as the company issuing the Bill of Lading containing the contract of affreightment. All the aforesaid three defendants are foreign companies and were sought to be served through defendant No. 4 who were impleaded as the local agents of the first three defendants and the vessel. The service of the summons against the three defendants was effected on defendant No 4 and on 20‑11‑75 defendant No 4, made Misc. Application No. 191/76 under Order V of rule 9 read with Order III, rules t and 2, C. P. C. for re‑calling the summons and for effecting service directly on the said defendants.

4. In Suit No. 168/76 a consignment of tea was shipped from Colombo for Karachi by s. s. `Lela'. Upon the arrival of the vessel at Karachi, in them case also a joint survey was made which revealed that the Chest planks containing the tea were broken and certain quantity of tea was found short. In this case also the goons were insured by the plaintiff who settled the claim of the consignee and thereby obtained subrogation in Its favour. This suit has been brought against defendant No. 1 as the local agent of defendant No. 2 the charterers and defendant No. 3 as the carrier who issued the Bill of Lading. Defendant No. 4 was impleaded as the owner of the vessel or the authorised representative of the owner. The service of summons in this case against defendant No. 2 was effected on defen dant No. 1 as their agent. Defendant No. 1 returned the summon to the Additional Registrar on the plea that they had no authority to accept the summons on behalf of the defendant No.

2. By his order dated 27‑5‑76, however, the Additional Registrar held the service of summons on defendant No. 2 through defendant No. 1 as good service. Thereupon the defendant No. 1 filed the present petition bearing No. 4034/76 under rule 15 of the former Sind Chief Court Rules as applicable to this Court seeking the recall of the order passed by the Additional Registrar and requesting that defendant No. 2 be directly served.

5. It is pertinent to mention that the local agent in both cases through whom services were sought to be affected is the same namely Burjorjee Cowasiee & Company. In Suit No. 436/75 Mr. Shahpur D. Shroff a partner of the firm acting as the local agent had flied an affidavit in support of the application and at the request of the plaintiff in that suit I bad allowed the cross‑examination of the said deponent under Order XIX, rule 2, C. P. C. In consequence Mr. Shroff was cross‑examined touching the question of the scope of agency of the said firm via‑a‑via the defendants who were served through the firm. In Suit No. 168/78 an application was submitted on behalf of the plaintiff but I had refused the request by my order dated 8‑4‑77 on the ground that in this case only a petition under rule 15 was submitted and in absence of an affidavit the request for cross‑examination of Mr. Shroff was not maintainable.

6. Before dealing with the main question arising for decision I would dispose of a preliminary objection raised by Mr. Ashfaq Hussain for the plaintiff in Suit No 168/76 questioning the maintainability of the petition under rule 15 Sind Chief Court Rules on the ground that the petition not being supported by affidavit was liable to be dismissed under the rules. At the very outset it may be stated. that the objection is purely technical and if at all would be a mere irregularity not affecting the merits of the case. Reliance was placed in this connection on rule 74 which provides that an interlocutory application, Inter alia shall be supported by affidavits stating clearly the grounds and the facts on which the application e.g based. The present petition is under rule 15 the marginal heading for which is "appeal from the Registrar to a Judge" but it wits contended that the rule itself uses the words "any party desiring to have any question which has been decided by the Registrar (O/S) referred to Court, may apply there for . . . . : ' and further that such application may be made by petition. On the language of the rule, it was contended that the rule obviously envisaged a interlocutory application. Considering the nature, scope and object of the rule I am unable to agree that a petition tender rule 1.5 is an 'interlocutor application' in the sense In which such applications are contemplated in the rules. It is no doubt true that rule 3(51 defines "interlocutory application" to mean an application in any suit. appeal or proceeding, already instituted in the Court, not being a proceeding for execution of a decree or order. But the word used in rule 15 is 'petition' and the object: of the rule is to permit a party to obtain a review or reconsideration of an order passed by the Registrar in miscellaneous matters which the Registrar is competent to dispose of under the rules. The obvious object was to provide for era intra‑Court arrangement for Judicial decisions of question by the Court, which .may otherwise be of a formal nature. It is in view of the nature of the proceedings under this rule as an appeal that a period of limitation of 8 days has been provided further the expression "order complained or' clearly indicates that the Court while hearing a reference under rule 15 sits in appeal against the order of the Registrar. Besides the requirements provided in rule 74 are predicted by the opening words "except where otherwise provided by these rules or by any law for the time being in force." (laving regard to this it appears that rule 15 is a self‑contained rule and clearly provides that the application there under is to be made by petition. If the intention of the rule‑maker was to treat such an application as an interlocutory application as defined, the rule would have provided that such reference may be made on an interlocutory application. I am therefore of the opinion that upon the language of the rule in question, ii is not necessary for an applicant to support the petition with an affidavit as required by rule

74. By this it may not be understood that an affidavit cannot at alt be filed in support of such petition. If it is necessary to rely on facts which are not already on the record, it may be open to a party to file an affidavit disclosing such facts.

7. Now as observed earlier the question that falls for decision it; whether the firm of Burjorjee Cowasjee & Company (hereinafter referred to as the shipping agents) is the agent of the concerned defendants empowered or bound to accept the service on their behalf. The contention on behalf of the shipping agents is that they are acting as the shipping agents only, for the concerned parties and that therefore. the agency did not extend to acting as the agent for service on behalf of the defendants in question: In this connection it was stated that the principal defendants upon whom the service is sought to be effected through the shipping agents are all foreign companies stationed abroad. Accordingly the submission was that the provision for service specially applicable to their case would be Order V, rule 15, C. P. C. which provides that where the defendant resides out of Pakistan and has no agent in Pakistan to accept service, the summons shall be addressed to tree defendant where he is residing by post, the submission of the other side is that under rule 12 of Order V it is permissible to effect service on an agent empowered to accept service and under rule 13 service shall be good if it is effected on any manager or agent who at the time of service. personally carries on business of work for tile defendant within the local limits of the jurisdiction of toe Court in case the suit relates to any such business or work. On the strength of these provisions it was contended that the shipping agents are carrying on business for the concerned defendants in Karachi, Alternatively it was urged that the shipping agents are recognized agents within the meaning of Order III, rule

2. C. P. C. and are therefore liable to accept service on behalf of the defendants.

8. It may at the very outset be pointed out that the question for consideration is only confined to the scope of authority of the shipping agents, far, the fact remains that they are agents of the concerned defendants. In other words, the question is whether in the facts and circumstances of the present cases the agency of the shipping agents extended to accepting service on behalf of their principals. I am unable to agree that merely by the fact of the firm acting as shipping agents. they can be held to be recognized agents within the meaning of Order lIl, rule 2, C. P. C. This rule provides that recognized agents o!' parties are persons (a) holding powers of attorney, authorising ‑them to make and do appearances and acts on behalf of such parties and (b) persons carrying on trade ,,r business for and in the name of parties not resident within the local limits of the Jurisdiction of the Court. 1t is nobody case *at the shipping agents bold such powers‑of‑attorney. It is also not possible to hold on the evidence on record that the shipping agents are carrying on trade or business for and in the name of the defendants. It his been brought on record through the affidavit and cross‑examination of Mr. Shroff the partner of shipping agents that their firm has been doing business since 1890 and it is obvious that they are doing business in their own name. It is further their case that they are licensed under tire Customs Act to provide specified special services to whosoever engages them. For the purpose of obtaining the statutory licence they seem to have made a general declaration in 1954 relating to all vessels which came to Karachi through their agency. In Commissioner of Income‑tax v. Muhammad Idrees Barry & Company (P L D 1967 S C 49) where the service was effected upon the salesman of the firm. Order Ill. rule 2(b) and rule 13(1) of Order V of the Code of Civil Procedure came up for construction and it was hold that having regard to the language of rule 6 of Order 111, the appointment of recognized agent for the parties for service must be made as instrument in writing. It was similarly held in Messrs Idrees Barry & Co. v. Commissioner of Income-tax (P L D 19W Lah. 852) (a case between same parties) that an authority to accept service of notice as agent roust he in writing, for service to be effective under Order V, rule 12, C. P. C. as well as for the purposes of a recognized agent under Order V, rule 2 and 3, C. P. C.

9. The onus for showing that the shipping agents in these two cages had such authority in writing lay upon the plaintiffs. But nothing has been shown to prove that such authority in writing was executed by the concerned defendants in favour of the shipping agents.

10. A careful analysis of the provisions of the Code of Civil Procedure shows that trio cardinal principle adopted as regards service is that wherever practicable. service should be made on the defendant In person (vide Order V, rule 12). The Code, however, provides for alternate modes of service upon the defendant through the following persons on his behalf :‑ (i) Agent empowered to accept service. (ii) Recognized agent. (iii) Where the suit relates to any business or work against the defendant not residing within the jurisdiction of the Court, a manager or agent who at the time of service personally carries on business or work for the defendant within such limits. (iv) Agent incharge of immovable properties. (v) An adult male member of the family of the defendant, residing with him. (vi) The pleader of the defendant. In each of the aforesaid cases the rules make specific provisions with regard to the mode of service. In case therefore, the defendant is not personally served the service has to be effected strictly in conformity with the relevant. rule applicable to the person through whom he is served. In the present case I have already discussed the case of agent empowered to accept the service and in the light of authoritative opinion held that verbal authority is not enough. Likewise recognized agent can also be appointed only by an instrument in writing. The remaining category of parsons, relevant for the present cases is the class of persons mentioned in the third category above. A perusal of Order V, rate 13, C. P. C. its this connection shows that the first limitation is as regards the nature of the suit. The rule is not attracted to all kinds of suits but only those relating to the business or work. Secondly the manager or agent must be a person who is carrying on business or work for and on behalf of the absent owner. A. mere servant employed to carry out orders has been held to be not such an agent. It was observed in Commissioner of Income‑tax v. Muhammad Idrees Barry & Co. already referred to above, that the manager or agent contemplated by this rule is one who has independent discretion subject to general guidance by the principal to carry on the business. It was emphatically contended for the plaintiffs that upon the evidence of Mr. Shroff it was established that the shipping agents were exercising independent discretion in carrying out the business on behalf of their principals. In this behalf it was pointed out that the shipping agents admit the following facts (1) That they were responsible for the loss or damage to the Cargo discharged by the vessel which came under their agency. (2) Applications for survey of the damaged goods were made to them by the consignees and surveyors were appointed by them whenever necessary. (3) That they issued the delivery orders to the consignees in respect of all the goods discharged by the vessel. (4) Some claims but not all pertaining to damage to or loss of goods discharged by the vessel were lodged with them. (5) That although they did not accept goods for export in respect of this particular vessel, in the past they have accepted the bookings of goods for export on the vessels belonging to the same owners." It was explained by the witness that they never accepted freight for the cargo exported in the past as that wits arranged directly, by the principals. As to delivery orders the witnesses stated that they were issued on behalf of the charterers ors the basis of Bills of Lading submitted by the consignees after verifying the same with the manifest and copies of Bills of Lading received by them from the charterers.

11. It is obvious from the facts of these cases that the main work entrusted to the shipping agents was as Custom House agents. Section 207 of the Customs Act, 1969 provides that no person shall act as an agent for the transaction of any business relating to the entrance or departure of any vessel unless such person holds a licensee granted under the rules. Section 208 of the same Act provides that when any person applies to any officer of the Customs for permission to transact any specified business with him on behalf of any other person, such officer may require the applicant to produce a written authority frown the person on whose behalf such business is to be transacted. Section 2(a) defines "agent" to mean a person licensed under section 207 or permitted to transact any business under section

208. Section 55 (e) of the Customs Act provides for refusal to give port clearance to a vessel until certain conditions enumerated therein are fulfilled or complied with and sub‑clause (e) of subsection (1) thereof provides as under :- "The agent, if any delivers to the appropriate officer a declaration in writing to the effect that such agent is answerable for the discharge of all the claims for damage or short delivery which may be established by the owner of any goods comprised in the import cargo in respect of such goods." In exercise of the powers conferred by section 219 of the Customs Act the Central Board of Revenue made the Customs Agents (Licensing) Rules. In rule 2(b) "Customs Agents was defined to meant an agent licensed under these rules for the transaction of any business relating to the entrance or clearance of any conveyances (vessel) or the import or export of goods or baggage in a Custom House or Land Custom Station. These rules provide for making application and grant of licence as a Customs agent and other allied matters. An examination of the aforesaid provisions of the Act and the rules, clearly spell out the statutory obligation and toe scope of the authority of a shipping agent. It is quite obvious that such agent is responsible for performing specified duties and discharging specified obligations for which he is personally liable under the statute, whatever may be his rights for contribution or compensation against his principal. But in the performance of his limited duties such an agent cannot be said to carrying on generally the business of a particular principal by the exercise of As his discretion as an agent doing business on behalf of his principal. The shipping agent provides his services to all and sundry who may choose to avail his services, so that he does not act for a single principal but does his own business in his own name for his clients. The essence of agency relevant for the purposes of service, on the other hand seems to be that the agent must be authorised to initiate any business himself on behalf of his principal acid must have the power to enter into contracts on behalf of such principal. I am therefore, of the opinion that the person simply employed for a particular voyage to obtain freight or to issue delivery order or to settle claims is not an agent within the purview of rule 13 of Order V, C. P. C. Noise of the circumstances relied upon by the plaintiffs from the evidence of the shipping agents therefore, establish that they were carrying on business for the concerned defendants.

12. For the foregoing reasons therefore, the service effected upon the particular defendants mentioned in the foregoing part of this order through Messrs Burjoryee Cowasjee & Co. cannot be held good service.

13. In the result I would order that direct service be effected afresh on these defendants in the manner provided by Order V, rule 25, C. P. C. S. Q. Order accordingly.