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Judgment
Sadasivam, J.—Appellant, the Andhra Co-operative Marketing Federation Limited, by agents, Messrs. Gopalan Trading Company booked
4,426 baskets of onions on 18th May 1958, in the ship s.s. State of Madras, for being transported from Madras to Singapore. The ship was
originally owned by the first Respondent-first Defendant Eastern Shipping Corporation, and, subsequently, taken over by the second Respondent-
second Defendant, Shipping Corporation of India Limited. 1,090 baskets of onions booked under the bill of lading the original of exhibit B-1,
dated 18th May 1968, stowed in hatch No. 1, as mentioned in the Plaintiffs notice exhibit B-2, were found damaged when the ship arrived at
Singapore on 26th May 1968. The bill of lading and other documents were sent by the Plaintiffs for being negotiated through the United
Commercial Bank Limited, and handed over to the consignees, Messrs. Nam Seng, at Singapore. But on 27th May 1958, at 12-27 p.m. the
consignees Messrs. Nam Seng sent the telegram exhibit A-3 to the Plaintiffs refusing to take delivery of the goods except on the latter''s account
for sale on the ground that the onions were damaged by overheat. The consignees again sent another telegram on the next day at 9-55 a.m.
reiterating the fact that they cannot take delivery of goods as the onions had deteriorated and offering to sell the onions on behalf of the Plaintiffs, if
necessary instructions were sent to the Bank. The Plaintiffs sent the communication exhibit A-5 to Messrs. Nam Seng referring to the cables
exchanged between them and requesting them to take delivery of the goods and sell the same on their account. It is clear from the first Defendant''s
letter exhibit A-6, dated 31st May 1958, that Messrs. Nam Seng took delivery of the suit consignment of 1090 baskets of onions on the previous
day. Messrs. Nam Seng sold the goods and sent the statement of accounts along with the letter exhibit A-7 to the Plaintiffs. The Plaintiffs appear to
have asked Messrs. Lloyd''s Agency to certify the damage in respect of the suit consignment of onions. But it appears from exhibit A-8 that even
two days before the application for survey was received, that is on 29th May 1958, the ship s.s. State of Madras sailed from Singapore. In the
notice exhibit B-2 the Plaintiffs stated that the reason for damage was the loading of onions more than the capacity of the hatch and putting both
mango and onion baskets together and they claimed the value of the onions as Rs. 10,490.76. In their reply exhibit A-9, the first Defendant denied
the fact that the mangoes and onions were loaded together and stated that the onions were kept separately in racks and stated that though due to
heavy onion bookings two additional tiers were loaded, it was not more than the capacity of the hatch. After further exchange of notices, the
Plaintiffs filed the suit to recover Rs. 10,201.31 being the value of the onions consigned by them, less the net proceeds of Rs. 289.45 received by
them by the sale of the damaged onions.
The learned v. Assistant Judge, City Civil Court, Madras, found that there was no negligence on the part of the Shipping Company, that the
Shipping Company could not be held liable for the damage to the onions caused by the inherent vice of the goods and improper packing, that it
was open to the Defendants to urge that the clauses in the bill of lading entitled them to claim immunity in the absence of negligence, and that the
Plaintiffs had not adduced acceptable direct evidence to show the real extent of damage and in the result dismissed the suit with costs.
Exhibit B-1 is a true copy of the bill of lading issued to the Plaintiffs and it contains rubber stamp endorsements which are not found in the copy
of the bill of lading exhibit A-2 produced by the Plaintiffs. The learned trial Judge has in paragraph 5 of his judgment given good reasons as to why
it is not possible to rely on exhibit A-2, which does not contain the stamped endorsements found in exhibit B-1, which is a true copy of the bill of
lading. It is clear from the printed Clauses 26 and 27 on the reverse of the bill of lading exhibit B-1 that the stamped endorsements on the bill of
lading are also binding on the parties as having been agreed to by them. Two of the three stamped endorsements are relevant and they are as
follows:
Onion bags and baskets frail carried at shippers risk. Steamer not responsible for outturn or condition of contents.
Perishable Cargo, Company is not responsible for decay or loss of contents.
It is clear from exhibit B-11, the receipt issued by the first Defendant, that out of 4,425 baskets consigned by the Plaintiffs, 2,999 baskets were in
the first hold and 1,426 baskets were in the second hold. It is clear from the Plaintiffs'' notice exhibit B-2 that 1,090 baskets of onions forming the
suit consignment were stowed in hatch No. 1 of s.s. State of Madras. The receipt exhibit B-11 shows that the consigned goods were in apparent
good order and condition, subject to all the conditions of the company''s bill of lading.
It is an undisputed fact that when the goods arrived at Singapore there was considerable damage to 1,090 baskets of onions consigned under
the original of exhibit B-1. Common carriers including carriers by sea for hire were under common law liable as insurers of goods, that is, they
were responsible for every injury to the goods occasioned by any means whatever except only the act of God and the King''s enemies. But their
liability was subsequently modified by legislation. The Indian Carriage of Goods by Sea Act. 1925, was passed in pursuance of the
recommendations of the International Conference on Maritime Law held at Brussels in October 1922. It is clear from Section 4 of that Act that
Every bill of lading, or similar document of title issued, in India which contains or is evidence of any contract to which the rules apply, shall contain
an express statement that it is to have effect subject to the provisions of the said Rule as applied by this Act.
Article III of the Schedule to the Act refers to the responsibilities and liabilities of the carrier and Article IV of the Schedule refers to rights and
immunities of the carrier. The Defendants rely on Rule 2(m) relating to the inherent vice of goods and Rule 2(n) relating to insufficiency of packing
in Article IV of the Schedule as defence to the action and they are entitled to do so. The Plaintiff rely on Rule 1(c) of Article III of the Schedule
under which the carrier shall be bound, before and at the beginning of the voyage, to exercise due diligence to make the holds and all other parts of
the ship in which goods are carried fit and safe for their reception, carriage and preservation, and on Rule 2 of Article III of the Schedule that
Subject to the provisions of Article IV, the carrier shall properly and carefully lead, handle, stow, carry, keep, care for and discharge the goods
carried.
There can be no doubt that if the carriers neglected their statutory duties, it will give rise to liability in damages. In Halsbury''s Laws of England
third edition, Volume XXXV, at page 416, in paragraph 594, it is stated that:
It is the duty of the master, as representing the ship owner to take reasonable care of the goods entrusted to him.
and that
the extent of this duty varies according to the nature of the goods and the circumstances of the particular case.
It is clear from paragraph 595 at page 418 of the same book that:
It is the duty of the master not merely to do what is necessary to preserve the goods on board his ship during the ordinary incidents of the voyage,
but also to take reasonable measures to check and arrest their loss, destruction, or deterioration through accidents, for the unavoidable effects of
which there is, by reason of an exception in the contract, no original liability upon the ship owner and for the master''s failure to perform this part of
his duty the shipowner is equally responsible.
The common law rules have been summarised in paragraph 20 at page 20 of British Shipping Laws, Volume II Carriage by Sea by Carver thus:
Where, then, a shipowner receives goods to be carried for reward, whether in a general ship with goods of other shippers, or in a chartered ship
whose services are entirely at the disposal of the one freighter, it is implied in common law, in the absence of express contract.
That he is to carry and deliver the goods in safety, answering for all loss or damage which may happen to them while they are in his hands as
carrier; Unless that has been caused by some act of God, or of the King''s enemies; or by some defect or infirmity of the goods themselves, or their
packages or through a voluntary sacrifice for the general safety;
And, that those exceptions are not to excuse him if he had not been reasonably careful to avoid or guard against the cause of loss, or damages; or
has met with it after a departure from the proper course of the voyage; or, if the loss or damage has been due to some unfitness of the ship to
receive the cargo, or to unseaworthiness which existed when she commenced her voyage.
It is clear from paragraph 97 at page 84 of the same book that the contract of the shipowner in the bill of lading is that he will, subject to the
excepted perils, deliver the goods at their destination in the like good order and condition in which they were when shipped. The exceptions are
now contained in article IV of the Schedule to the Indian Carriage of Goods by Sea Act, 1925. It is clear from the decision in Asiatic Steam
Navigation Co. Ltd. Vs. Jethalal Dharamshi and Co. and Another, that if the loss or damage arises from the neglect, fault or failure in the duties
and obligations as provided in the statutory Articles or rules then a clause in the bill of lading exempting the carrier from liability for such loss and
damage would be null and void and of no effect. The whole consignment of tobacco in that case was reduced to a charred mass by spontaneous
combustion caused by the presence of water and moisture in the tobacco. The effective and proximate cause of the damage was found in that case
to be due to the grossly careless and negligent stowing of the goods by the carrier and the carrier was held liable for the loss. It is pointed out in the
decision that if the effective and proximate cause for the spontaneous combustion is the wetness of the tobacco then the shipper and not the carrier
will have to bear the loss. The defence of the inherent vice of the goods was rejected in that case on account of negligent and careless acts of the
carrier. The carrier in that case strongly relied on the decision in Bradley and Sons, Ltd. v. Federal Steam Navigation Co., Ltd. (1927) 137 L.T.
266 which related to a consignment of apples which were affected with the species of internal browning. The Plaintiff''s case in that decision was
based on breach of the contract to safely deliver the goods in accordance with the terms of the Bills of Lading and upon negligence and
unseaworthiness in connection with ventilation of the holds and the withdrawing of gases from the same. The carrier''s case there was that the ship
was seaworthy and that there was no negligence in or about the carriage and that the damage was due to inherent quality of the apples shipped. It
was found there as a fact that the damage was caused to the apples not because of the ship or of the sea, but because they were apples which
were not fit to make their voyage in the ordinary way. It is clear from the judgment of LORD SUMMER quoted in the above decision that the
apples did not die a natural death, that some other failing must have caused it and that as they are not said to have been otherwise ill-treated on
board the ship, that failing must have been at least latent before shipment.
We have already referred to the admitted fact in this case that a large quantity of onions consignment by the Plaintiffs was found damaged at its
destination. The Defendant''s plea is that it is due to the inherent vice of the goods and the packing in frail baskets. One of the endorsements on
exhibit B-1 refers to the fact that the onions were packed in frail baskets. Sri A. Sundaram Iyer for the Appellants questioned as to how packing in
frail baskets could cause damage to the onions. On account of the packing in frail baskets, the onions in those baskets will be subject to
considerable pressure by reason of the weight of the baskets kept over them and the pressure could very well have contributed for the
deterioration of the onions. It is quite possible that if the onions had been packed in baskets which could withstand such pressure, the onions might
not have deteriorated. D.W.1, C.K. Venkatakrishnan has stated in cross-examination that the baskets were in a sound condition when they were
loaded, but that he cannot say specifically what the nature of the Plaintiff''s cargo was. The main defence of the Defendants is that the deterioration
of the onions was due to the inherent vice of the goods. But the Plaintiffs can succeed in their claim, if they are able to prove negligence on the part
of the Defendants.
It is alleged in paragraph 3 of the plaint that as the baskets of onions were loaded along with mangoes in the same hatch, the onions became
overheated and that as the hatch itself containing these goods was overloaded, it caused great pressure and the onions were damaged for both the
reasons. In exhibit B-2 the Plaintiffs have put forward both the reasons to account for the damage to the goods. But the first Defendant has denied
the same in its reply notice exhibit A-9. P.W. 1, C.N.N. Swamy is the Customs Shipping and Clearing Agent of Gopalan Trading Company, who
were the shipping agencies of the Plaintiffs. He admitted in cross-examination that the mango baskets were loaded in the lower hold and the onion
baskets were loaded in the racks and that the mangoes and onion baskets were not jumbled together. P.W. 2 Andrews is employed in Binny and
Company, who are shipping agents. He has been examined to speak to the practice of loading mangoes and onions in separate holds of a ship. But
it is clear from his evidence that he has not seen the ship s.s. State of Madras and that in steamers in which he had loaded onions and mangoes
there were no racks for stowing onions. His evidence is only useful to show that the mangoes are liable to emit heat. But when he was specifically
questioned as to what would happen if mangoes were stored lower in the hold and onions were stowed in the racks, he expressed his inability to
state the consequence. The evidence of D.W.1, C.K. Venkatakrishnan, Supervisor of the Agents of the first Defendant company is that the mango
baskets were loaded in holds 1 and 2 and that onion baskets were loaded in the racks. It is clear from his evidence and the stowage plan exhibit
B-12 of the ship State of Madras for the particular voyage that the racks are 13 feet from the bottom of the hold. Thus having regard to the
admission of the Plaintiffs'' witness P.W.1, C.N.N. Swamy and the evidence of D.W.1, C.K. Venkatakrishnan, it is not possible to accept the
plaint averment that the onion baskets were stowed along with the mango baskets.
The second reason alleged in the plaint for the deterioration of the suit consignment of onions is that there was overloading of goods. We have
already pointed out that the suit consignment was kept in the racks in the first hold alone. In the reply notice exhibit A-9 the first Defendant
company has stated that though it is possible that on the particular voyage one or two additional tiers were loaded owing to heavy onion bookings,
it was certainly not more than the capacity of the hatch. There is nothing in the evidence of the Plaintiff''s witnesses to prove that there was
overloading of goods in any of the holds of the ship. On the other hand, it is clear from the evidence of D.W.1, C.K. Venkatakrishnan that there
was no overloading in either hold No. 1 or in hold No. 2 of the ship State of Madras. P.W. 1 however, stated in his evidence that usually in each
hold, baskets of 6 or 7 rows will be loaded and that in that particular voyage baskets of 16 or 17 rows height were loaded. But no suggestion was
put to D.W.1 that unusually large number of baskets were kept one over the other, as stated by P.W.1, C.N.N. Swamy. In fact, no such allegation
has been made in the prior notice sent by the Plaintiffs, or in the plaint.
The privity of shipper to bad stowage is dealt with in paragraph 683 at page 574 of British Shipping Laws, Volume III, Part II Carriage by Sea,
by Carver, in the following terms:
The mere fact that the character or shipper knew how the goods were being shipped, and assented to what was done, will not necessarily excuse
the ship-owner. But the shipper will be estopped from complaining of a method of stowage which has been directed by him and he may be so
estopped by merely assenting to it.
Though P.W.1 was present there is nothing to show that he directed the manner of stowing of the onion baskets. P.W.1, C.N.N. Swamy did not
complain at the time of stowing about the keeping of mango and onion baskets in the same hold or about the overloading of goods in the hold, or
the loading of onion baskets, of 16 or 17 rows height, instead of the usual height of 6 or 7 rows. His conduct only shows that his present evidence
about these facts could not be true.
The learned Advocate for the Appellants relied on pages 194 and 195 of the book Stowage-The properties and Stowage of Cargoes by
Captain Thomas, as regards stowage of fruits, and on page 3 286 and 287 of the same book as regards the stowage of onions. It is stated in that
book that onions quickly deteriorate especially if the ventilation is insufficient and for this reason lower hold stowage is seldom resorted to. The
requirement of uninterrupted ventilation for fruits and onions is stressed in that book. But there is nothing in that book to show that onion should not
be stored with fruits generally, or with mangoes in particular. We have already referred to the evidence of P.W.2, Andrews, who was unable to
state the consequence of stowing onions in the racks of the hold in which the mangoes are stored. In paragraph 682 of British Shipping Laws,
Volume III, Carriage by Sea by Carver it is stated:
Though the master ought to be skilful in the matter of stowing ships, this is to be construed reasonably; and mere ignorance of the effect of stowing
particular kinds of goods together will not be imputed to him as negligence, unless as a competent person he must reasonably be expected to know
it.
P.W.2, Andrews who is employed as a Supervisor in Binny and Company, shipping agents, does not know the consequence of storing onions in
racks in the same hold in which the mangoes are stored. Having regard to this evidence, it is not possible to impute negligence to the master of the
ship in stowing onions in racks of the same hold in which mangoes are loaded.
Sri A. Sundaram Iyer argued that if the master had taken care to see that there was full end uninterrupted ventilation which is indispensable for
the preservation of the onions, the onions would not have deteriorated. Firstly, there is no such plea in the plaint or in the prior notices sent by the
Plaintiffs Secondly, it is clear from the evidence of D.W.1, C.K. Venkatakrishnan that 11,000 onion baskets were leaded in the racks in hold No.
1,13,000 onion baskets were loaded in racks in hold No. 2 and 46,702 baskets of onions were loaded in the racks in hold No. 4. Even the
evidence of P.W.1, C.W. C.N.N. Swamy is that they loaded 4,425 baskets and it is clear from exhibit B-11 that they were loaded in holds Nos.
1 and 2. But there was damage only to the suit consignment of 1,090 baskets covered by the bill of lading exhibit B-1. Further, there is the
evidence of D.W.1, C.K. Venkatakrishnan that there are open tubes in the vessel which will be turned towards the direction from which the air
flows and that the air will be sucked into the holds as the vessel proceeds. It is true he admitted that he can speak only to the condition of
ventilation at the time of loading and not as to what happened subsequently during the voyage. The ship''s Log Book has been marked as exhibit
D-13 and the relevant entries have been marked as exhibits B-14 and B-15. It is clear from Section 2 of the Commercial Documents Evidence
Act that notwithstanding anything contained in the Indian Evidence Act statements of facts in issue or of relevant facts made in any document
included in the Schedule as to matters usually stated in such document shall be themselves relevant facts within the meaning of that Act. The Official
Log Book kept by a British ship is item 6 in Part I of the Schedule. The official Log Book kept by a foreign ship is item 2 of Part II of the
Schedule. It is not clear whether after independence of India the words British ship in item 6 of Part I of the Schedule have been altered to Indian
Ship. By virtue of Section 3 of the said Act, a Court shall presume the genuineness of the documents mentioned in Part I of the Schedule and may
presume the genuineness of the documents mentioned in Part II of the Schedule. Thus it is open to this Court to presume the genuineness of the
relevant entries in the Log Book. The learned v. Assistant Judge, City Civil Court, Madras, has rightly pointed out that the entries in the Log Book,
show that on each day the vents had been tended and that this would clearly establish that the ship''s personnel cannot be accused of being
negligent in providing ventilation for the cargo.
The Defendants have established that the deterioration of the unions in the suit consignment was mainly due to the inherent vice of the goods
and probably due to the insufficiency of packing, as evident from the frail baskets used. It is true the Defendant company cannot escape liability for
negligence by merely relying on some clauses in the bill of lading, namely, hat the goods are perishable and the company is not responsible for
decay or loss. In fact the terms of the bill of lading exhibit B-1 are subject to the carriers'' responsibilities and liabilities under Article III of the
Schedule to the Indian Carriage of Goods by Sea Act. But in view of our finding that the Plaintiffs have failed to establish that the carriers failed in
any of their duties as contemplated in Article III of the Schedule to the Indian Carriage of Goods by Sea Act, or, were negligent, the Plaintiffs can
have no cause of action against the Defendants. For the foregoing reasons we find that the Plaintiffs have failed to prove that the Defendants have
violated any of the conditions imposed on them under Article III of the Schedule to the Indian Carriage of Goods by Sea Act, or that there was
any negligence on the part of the Defendants.
The learned v. Assistant Judge, City Civil Court, Madras, was right in stating that there is no acceptable direct evidence to show the real extent
of damage, or what amount was actually realised by sale of the damaged goods. But the finding of the learned v. Assistant Judge that the
Defendants are, therefore, not liable to pay any damages cannot be accepted, if really the Plaintiffs had proved the cause of action alleged by them.
Apart from producing exhibit A-7 the Plaintiffs have not adduced evidence in support of the statement of account showing the amount for which
the damaged onions were sold. It appears from exhibit A-5 sent by the first Defendant that in the Plaintiff''s communication reference was made to
the estimate of damages to the onions in some baskets at 80 per cent and in some other baskets at 40 per cent. Exhibit A-8 refers to Lloyd''s
Survey Report dated 18th May 1958, but it has not been produced in this case. Having regard to these infirmities, it is difficult to estimate the
damages correctly, or award the amount claimed by the Plaintiffs. If the Plaintiffs had established that the Defendants had neglected any of their
statutory duties, or were guilty of negligence, the damages has to be estimated roughly, on a consideration of the relevant circumstances in the case
and the evidence of P.W.1, C.N.N. Swamy. But it is unnecessary to pursue this matter further in view of our finding that the Plaintiffs have failed to
establish their claim against the Defendants.
The learned Advocate for the Respondents urged that the Plaintiffs can have no cause of action to sue for damages after they have assigned the
bill of lading to Messrs. Nam Seng. But there is no evidence to show that the Plaintiffs assigned the bill of lading to Messrs. Nam Seng. The
Plaintiffs sent the bill of lading only to their bankers for being negotiated. The evidence shows that as the goods were damaged they authorised
Messrs. Nam Seng to sell the goods on their behalf. In fact, the first Defendant has in paragraph 7 of its written statement only taken a vague plea
that the Plaintiffs have no cause of action against the Defendant. It is true that an issue has been framed in respect of the same, but no finding was
given on it. The learned Advocate for the Defendants did not finally press this contention that the Plaintiffs have no right to file the suit on the
ground that they had negotiated the bill of lading.
The decree and judgment of the v. Assistant Judge, City Civil Court, Madras, are correct and they are confirmed and the appeal is dismissed
with costs.