CENTRAL INSURANCE CO. LTD. Versus KONINKLIJKE NEDLLOYD
1. This suit for recovery of Rs.8,81,759 is filed by the plaintiff against the defendants. Briefly the case of the plaintiff is that the defendant No.1 are the carriers while the defendant No.2 are their agents. In the year 1973 M/s. Burewala Textile Mills Ltd. exported 216 and 360 bales of Grey Cotton Cloth 39" from Karachi to Rotterdam. This consignment was sent from Burewala in entirety and in good order and condition which reached at Karachi where the defendants verified * the description, quantity, quality, value, weight, measurement and packing by comparing the same with the invoice and other shipping documents. This consignment being for export was subjected to thorough examination by concerned authorities who also having expressed their satisfaction and Ending the consignment in good order and condition permitted its export. Accordingly the defendants carriers issued their clean bills of lading Nos.31 and 32 dated 21‑7‑1973 per their vessel s.s. "OLDEKERK". The said vessel arrived at the port of destination on or about 12‑9‑1973 when after the discharge it was discovered that a large number of bales were in damaged condition. Such notice was immediately served on the carriers asking them to appoint their surveyor but the request was turned down on the ground of Bill of Lading clauses. The plaintiffs challenge that it is illegal and deny as the bills of lading were clean and even if such clause was there then also the carriers were not absolved of their liability. The said consignment is said to have been insured with the plaintiffs under their Marine Cargo Insurance Policy on the terms and conditions enumerated therein. The plaintiffs, therefore appointed M/s. John Hudig & Sons as surveyors to carry out the survey of the said consignment who did so and prepared their report. The surveyors had also undertaken chemical test and submitted samples to the Chemical Laboratories. The plaintiff claims that the report of the surveyors is binding on the defendants. It is also the case of the plaintiff that the claim was referred to the defendants carriers who did not repudiate their liability to grant extension of time upto 12‑3‑1975 which shows that the factum of loss was not disputed but only the liability was under dispute. Finally the plaintiff settled the claim in foreign currency by paying US 88,175 and also obtained a letter of subrogation from the consignee. Consequently the plaintiff filed the present suit.
2. The defendants filed their joint written statement wherein they have taken the legal plea that the suit is not maintainable as the plaintiffs have no right to file the present suit and also that the defendant No.2 have been wrongly impleaded as party to the suit. The defendants deny that they verified, the description, quantity, quality, value, weight, measurement and manner of packing by comparing the same with invoice and other shipping documents. Their case is that these contents were inserted in the bills of lading by the shippers and that the answering defendants were not aware of the same. It is further asserted that as the external appearance of the bales did not give any reason to suppose that the inner contents could have been damaged therefore, such clean bills of lading were issued. The defendants have further stated in their written‑statement that at the time of arrival of the vessel at the Port of Rotterdam the bales in question were in apparent good order and condition which were handed over in the custody of Port Authorities and the consignee removed the bales from the landing shed without notice of loss or damage to the defendants. The factum of taking of survey is also denied by the defendants. The defendants further denied the claim of the plaintiffs. On these pleadings of the parties the following consent issues were framed:‑
(1) Whether plaintiffs have right to sue in respect of the bales in question?
(2) Whether the Defendants No.2 have been wrongly impleaded and the Defendant No.2 are entitled to special costs.?
(3) Whether the suit is barred under Article 111, clause 6 of the Carriage of Goods by Sea Act, 1925?
(4) Whether the suit is barred by limitation?
(5) Whether the consignees and/or persons acting on their behalf removed their bales from the Landing Shed without notice of loss and/or damage to the Defendant No.1 and/or their Agents and if so what is its effect?
(6) Whether the contents of the alleged survey report of M/s. John Hudiq & Son are correct and binding on the defendants?
(7) Whether the alleged damage to bales, if any, was pre‑shipment damage or damage arising and/or resulting from inherent vice and nature of goods and if so are the defendants liable?
(8) What were the contents of the bales, their condition, quality, quantity, weight and value at the time of shipment?
(9) Whether the plaintiffs committed breach of provisions of Foreign Exchange Regulation Act, 1947?
(10) Whether the Defendants committed breach of the contract of affreightment?
(11) To what reliefs, if any, are plaintiffs entitled?
3. ISSUE NO.1.
4. On this issue the learned counsel for the plaintiff has submitted that the consignment in suit was insured with the present plaintiff and that the present plaintiff have paid the amount to the consignee in foreign currency for the loss/damage sustained. The learned counsel has further submitted that the present plaintiff as subrogatees are entitled to file the present suit. He has placed reliance on the documents produced as Exh.5/9. This document is a subrogation receipt signed by the consignee in favour of the present plaintiff. As against this Mr. Nasimuddin Shaikh, appearing for the present defendants has submitted that this in fact is not a letter of subrogation but is a receipt given by the consignee. He has further submitted that the plaintiff have not produced the insurance policy and, therefore, it cannot be said as to what were the terms and conditions of the insurance policy. Reference has been made to the provisions of section 135‑A of the Transfer of Property Act. Sub‑clause (2) of the above section reads as under:
5. "(2) Where the insurer pays for a total loss, either of the whole, or in the case of goods, of any apportionable part, of the subject‑matter insured, he thereupon becomes entitled to take over the interest of the insured person in whatever may remain of the subject‑matter so paid for, and he is thereby subrogated to all the rights and remedies of the insured person in and in respect of that subject‑matter as from the time of the casualty causing the loss."
6. It is not denied by the defendants that the said amount has been paid by the plaintiff to the consignee. It is also not the case of the defendants that the consignment was not insured‑ with the plaintiff. Under these circumstances I am inclined to hold that plaintiff have right to sue provided the consignment was insured with them.
7. ISSUE No.2.
8. It is an admitted position that the defendant No.2 have acted as agents of defendant No.1 at Karachi Port and issued bills of lading bearing Nos.31 and 32 dated 21‑7‑1973 which fact is also not denied by the defendants. Under these circumstances I would answer this issue in negative and hold that they have been rightly impleaded as party to the suit.
9. ISSUES NOS. 3 & 4.
10. These issues involved common point. I therefore, take the same together. The admitted facts show that the vessel had reached at the destination i.e. Rotterdam on or about 12‑9‑1973 and discharged the consignment between the period 12 to 14th September 1973. The present suit has been instituted on 8‑3‑1975 which is beyond a period of 1 year. The case of the plaintiff as per paragraph 15 of the plaint is that the defendants did not repudiate their liability but proceeded to grant extension of time upto 12‑3‑1975 and the suit is, therefore, within time. The plaintiff have failed to produce any document in support of their contention. No letter of any sort from the defendants' side purporting to have granted extension of the period of limitation has been produced on record but on the contrary two letters Exh.5/14 and 5/15 dated 18‑10‑1974 and 3‑12‑1974 show that the defendants have specifically denied their liability and have contended that the damage caused to the consignment was an internal damage in the packing and the same had been pre‑shipment damage. It would not be out of place to quote herein below one paragraph from the letter Exh.5/14 which reads as under:‑
11. "It is very common that cargo loaded in apparent good order and condition is discharged in outward less good condition, since after a voyage of several weeks originally invisible wetness has become visible".
12. Under these circumstances where no such extension of time has been shown or proved the suit would be governed under provisions of Article III, clause VI of the Carriage of Goods by Sea Act and Article 30 of the Limitation Act. The above‑cited provisions provide that in such cases the period of limitation for filing of the suit is one year from the date when the loss or injury occurred whereas under the provisions of Article 31 of the Limitation Act the period of limitation would commence within one year from the date when the goods ought to be delivered. In the present case it is an admitted position that the vessel had reached at the destination on 12‑9‑1973 and the goods were discharged within a day or two. The plaintiff have not produced any documentary evidence to show as to when the delivery of goods was made but the witness of the defendants namely Mr. J. Den Duben (of M/s. Rotterdamshe Expertise Bureau, Marine Surveyors) of Rotterdam, states that his company was appointed as surveyors by M/s. Ruys & Co. B.V. to carry out the survey of the above‑cited consignment at the godown of consignee. He has stated that the consignment was discharged on 13/14‑9‑1973 whereafter the goods were removed from the port area. He has also placed on record the survey report of his company which is dated 31‑1‑1974 and shows that the survey in fact was taken on 25‑9‑1973 at the consignee's `premises at VEENENDAAL in the interior. In view of the above evidence even if the period of limitation is computed from the date of report then also the suit having been instituted on 8‑3‑1975 would be beyond the period of one year and, therefore, hit by law of limitation. Reliance may be placed on the case of Modern Textile Mills Ltd. v. National Shipping Corporation PLD 1991 Kar. 275. I would, therefore, answer these issues in affirmative and hold that the suit is barred by limitation.
13. ISSUE NO.5.
14. There. is nothing on record produced by the plaintiff to show if any notice was given to the defendants before removal of the bales from the landing shed. The first letter produced on record by the plaintiff is dated 25‑7‑1974 written by M/s. W.K. Webster & Co. to the defendant No.1 which shows that they are investigating this matter elsewhere. As against this the evidence of the surveyor Mr. J. Den Duben (Exh.13) and report produced by him show that survey had taken place on 25‑9‑1973 at the consignee's premises. In view of the above evidence I am inclined to hold that the plaintiff have failed to prove that they had removed the goods after notice of loss to the defendant No.1. Issue, therefore, is answered in favour of the defendants.
15. ISSUE N0.6.
16. The plaintiff hive not produced survey report of M/s. John Hudig & Sons. This issue is accordingly answered as not proved.
17. ISSUE No.7
18. As already discussed in earlier issues, the defendants have examined their surveyor Mr. J. Den Duden who has also produced the survey report p which shows that the consignment had already suffered damage before the shipment. There being no contrary evidence I would answer this issue in favour of the defendants.
19. ISSUE No.8
20. There is no dispute over the contents of the bales and their quantity, weight, value etc. However, the condition of the consignment is disputed and as already held above on the basis of the evidence of the surveyor (Exh.13) and report, I have held that the goods suffered from damage prior to shipment, this issue is answered in favour of the defendants.
21. ISSUE NO.9
22. This issue has not been pressed by the learned counsel for the parties.
23. ISSUE NOS 10 & 11
24. In view of the findings on the issues discussed above the present suit is dismissed with no order as to costs. Above are the reasons for the short order announced in Court on 22‑8‑1991.
25. A.A./C‑255/K Suit dismissed,