The Union of India (UOI) vs Ralli Brothers Ltd. and Others

M. Natesan, J.—This is an appeal from the judgment and decree, of this Court under its Original Jurisdiction dismissing the suit, C.S. No.

97 of 1956. The Union of India instituted the suit, originally against four defendants, claiming a sum of Rs. 66,491-11-5 on account of loss and

damage in respect of a consignment of British refined Granulated Sugar consisting of 90,799 bags, each bag weighing two cwt., the total weight

being T. 9,097-18-0-0 loaded at the Port of London and deliverable at the Port of Madras, J.V. Drake & Company the third defendant Were the

shippers and the Maritime Shipping and Trading Company Limited the owners of the ship, the S. S. '' Indore '' which carried the cargo. The first

defendant in the suit chartered the ship on the 4th April, 1955 (Exhibit D-1) is the charter party) specifically for a full complete cargo of refined

sugar in bags not exceeding 9,450 long tons net nor less than 9,000 long tons net for carriage to Madras. On the very day the third defendant in

the suit, the shippers, sub-chartered the ship for the carriage of the sugar. The goods were taken aboard at London on 22nd September, 1955,

Exhibit D-3 being the relative bill of lading. The ship arrived at Madras on 19th October, 1955 and it commenced to discharge the cargo op 27th

October, 1955 and the discharge of the cargo Was completed, it is stated, on 8th November, 1955. According to the plaintiff, there was

shortlanding of 414 bags of sugar weighing T. 41-8-0-0 as per bill of lading. The plaintiff also complained that 6,807 bags Were discharged in a

bad, slack, cut and torn condition and 747 bags of sugar were sweat-stained and damaged making the sugar unfit for use. The shortage in the

Weight in respect of the slack, cut and torn and sweat-stained bags was estimated at T. 86-13-3-4. There was a survey With reference to the

7,554 bags in slack, cut and torn condition or sweat-stained and as against this it was stated, there Were available 420 bags of ship-sweepings

and 521 bags of shed-sweepings giving a Weight of T. 76-12-2-25. In the plaint as framed the claim. is laid against the first defendant as

disponent owners "" and carriers of the steamer. The second defendant-company was impleaded as the agents of the first defendant. The third

defendant-company was impleaded as charterers and the fourth defendant as the agents of the third defendant. The first defendant, who are a

company incorporated in England, in their written statement denied that they were '' disponent owners'' of carriers of the steamer and referred to

the Maritime Shipping and Trading Company Limited, London, as the owners of the vessel, S. S. '' Indore '' from Whom the first defendant

chartered the ship under charter party dated 4th April, 1955. It Was pleaded that the charter referred to was only a voyage charter and not a

charter by demise and that the charterers had no control or possession of the vessel and the Master and the crew of the vessel were the servants

and agents of the owners of the vessel. The first defendant referred to the sub-charter entered into with the shippers the third defendant on identical

terms and pointed put that the bill of lading Was signed by the Master of the vessel as the agent of the owners thereof. While, thus denying all

liability for the loss and damage, on the merits also there Was traverse of the allegation that the consignment of tens 9,079-12-0-0 was received on

board at London in good order and condition. There was a denial of the charge of negligence and lack of due care and diligence in loading,

handling, stowing, carrying, keeping of caring for the consignment and, as regards the short-landing, it Was pointed out that the entire quantity had

been landed at the Port of Madras. It Was stated that in fact, there was an additional 11 bags landed and if there was any short delivery the matter

was one for settlement between the plaintiff and the Madras Port Trust. The second defendant, the agents of the first defendant while adopting the

Written statement of the first defendant, in variance with the written statement of the first defendant referred to the first defendant as the disponent

of the vessel. It was pleaded that since the disponent owners of the vessel were parties to the suit, the second defendant cannot be held liable for

the amount claimed by the plaintiff. As may be expected, defendants 3 and 4, the sub-charters and their agents pleaded that the plaint disclosed no

cause of action against them. The written statement of the first defendant is dated 19th July, 1957. Long after on 24th September, 1958,

Application No. 2065 of 1958 was taken by the plaintiff for impleading the fifth defendant, the Maritime Shipping and Trading Company Limited,

the actual owners of the ship, as party fifth defendant in the suit. In the affidavit in support of the application, it Was reiterated that the first

defendant in the suit are the ''disponent owners'' and carriers of the steamer S.S. ''Indore'', the second defendant being the agent of the first

defendant, the third defendant being the charterers and the fourth defendant, the agents of the charterers. The affidavit sets out negotiations

between the parties for settlement of the claim and of the stay of the trial of suit pending the negotiations as the cause for delay in taking out the

application. To this application, without prejudice to the contentions that may be raised in the suit, the parties had no objection and as per order

dated 6th August, 1955, the fifth defendant, as alleged owners of the steamer S.S. '' Indore '' was made party defendants. In the amended plaint, it

was stated that the fifth defendant was made a party to the suit, as it was contended by the first defendant that it was the fifth defendant as the

owners of the vessel that Were liable for the suit claim.

The owners of the vessel in their written statement, dated 9th June, 1960, while admitting their ownership of the vessel, denied that the first

defendant were ''disponent owners '' of the vessel. They specifically referred to the tally-sheet receipt u/s 39 (3) of the Madras Port Trust Act and

pleaded that the entire manifest quantity of sugar bags had been landed by the ship and taken delivery of by the Port Trust and if there had been

any short delivery to the plaintiff by the Port Trust of Madras, the plaintiff must look to the Port Trust, Madras.

On the pleadings, apart from quantum of damages, the main question for consideration was on whom was the liability for the damages. With

whom was the contract was the prime matter for discussion and the liability of the Port Trust, if any, had also to be ascertained. There Were as

many as 21 issues in the suit and the learned Judge as against the fifth defendant, held that the institution of the plaint without obtaining leave under

the Letters Patent could not be accepted as proper institution. It was, therefore, held that the Court had no jurisdiction as against the fifth

defendant. On the plea of limitation raised by the fifth defendant, it Was held that the claim as against the fifth defendant was barred by limitation,

the claim itself getting extinguished under Rule 6 of Article III of the Carriage of Goods by the Sea Act. The exoneration of the fifth defendant on

these legal bars have not been the subject of any argument before us, and rightly, the position being clear. The attempt before us has been to

sustain the claim against the first defendant as the carrier or the '' disponent owners '' of the vessel. We shall be adverting to this aspect presently.

On the merits while holding that 414 bags had not been delivered to the plaintiff by the Port Trust, the learned Judge Was of the view that this

was not a case of short landing as tally-sheets issued by the Port Trust showed the entire quantity of cargo as discharged. The Assistant Traffic

Manager of the Port Trust admitted that the entire quantity was landed and that the tally-sheets were correct. The learned Judge proceeded in the

view that the Port Trust by operation of law Was made to accept the goods as bailee of the consignee, when it took charge of the goods from the

ship and that the delivery of the goods to the Port Trust must be held to be delivery to the consignee. In taking this view, the learned Judge

purported to follow certain earlier decision of this Court. Now this view of the jural position of the Port Trust cannot be maintained after the

decision of the Supreme Court in The Trustees of the Port of Madras by its Chairman V.K.P.V. Shaik Mohamed Rawther and Co. (1963) 2

S.C.R.915. The legal relationship between the ship-owner, the shipper or the consignor and the consignee is thus enunciated in the said decision:

There is no doubt the ship-owner is the bailee of the shipper, the consignor, and that he is responsible for the delivery of the goods to the

consignee or a transferee according to the terms of the bill of lading. This duty the shipowner discharges only when he has delivered the goods to

the consignee or such person who be entitled to take delivery in accordance with the endorsements on the bill of lading. Delivery to the Board is

not delivery to the. consignee or person both because the delivery is to be on the presentation of the bill of lading and because the Act contains no

provision which would, constitute the Board an agent of the consignee for the purpose of taking delivery of the goods.... It is true that on the

Board''s taking charge of the goods and giving a receipt about it to the ship-owner, the master or the owner of the vessel is absolved from liability

for any loss or damage which may occur to the goods which had been landed, but this provision by itself does not suffice to convert the receiving

of the goods by the Board after they had been landed by the ship-owner to the Board''s taking delivery of those goods on behalf of the consignee.

The Board simply takes charge of the goods on being required by the steamer-agent to take charge of it....It is clear therefore that when the Board

takes charge of the goods from the ship-owner, the ship-owner is the bailor and the Board is the bailee and the Board''s responsibility for the

goods thereafter is that of a bailee. The Board does not get the goods from the consignee....

Lower down their Lordships pointed out:

The responsibility of the carrier for the goods does not cease merely by the technical discharge of the goods from the ship but continues up to their

delivery in accordance with the terms of the bill of lading.

In The Madras Port Trust Vs. K.P.A.T. Annamalai Nadar and Another, , following the above decision of the Supreme Court, we have ourselves

considered the relative positions of the ship-owner, the Port Trust and the consignee and the effect of the tally-sheet. It follows that the whole

matter and the relative liabilities of the parties in this case Will have to be examined afresh in the light of the above decisions. The plaintiffs do not

accept the correctness of the tally-sheets and question the finding that the entirety of the bags loaded have been discharged here we may remark

that for reasons best known to themselves, the plaintiffs have not made the Port Trust as party-defendant and made any claim against the Port

Trust. The explanation submitted at the bar is that a claim, if any, available against the Port Trust Was barred by limitation on the date of the suit.

Then there is the question of short weight of goods landed. Even if there is no actual short landing in the number of bags, the question of short

weight of goods landed would arise for consideration and on this the learned Judge was of the view that the real shortage in Weight could only be

about 11 tons. The learned Judge was further of the view that the entire shortage in Weight could not be attributed to the ship-owners, as the

goods were lying in the warehouse of the Madras Port Trust for a considerable time before delivery Was completed in March, 1956. The learned

Judge, therefore, fixes the liability of the ship-owners for one half of the shortage in weighment. The finding in this regard is attacked by the learned

Counsel for the plaintiff. It is pointed out that even if there has been no short-landing of 414 bags, there Was shortage in the contents of the goods

delivered covered by the 414 bags. Assuming they had gone into the shed-sweeping or ship-sweepings, it is submitted that in calculating the loss in

weight, the learned Judge has in effect given credit in favour of the defendants, of the Weight of the goods twice. The learned Counsel points out

that : on a proper calculation on the tonnage actually delivered, the shortage Would come on T. 51-10 cwt. There is much to be said for this

contention. As We are remanding the matter for fresh disposal, we are not going into the details. The learned Judge proceeds on the basis that

there was no proof of the actual weight shipped. The fact that the charterer the third defendant, is also the shipper, has some bearing on the

question and has not been adverted, to by the learned Judge. The correspondence shows that there has been complaint of bad handling of the

sugar bags during the discharge. In the documents paper at page 84, there is a protest by the Assistant Director (Clearance and Storage) that the

shore labourers were invariably using hooks while handling sugar bags ex S.S. '' Indore '' despite repeated requests not to do so, and that

considerable damage Was caused to the bags by the use of the hooks. A letter dated 3rd November, 1955, at page 92 of the documents points

out that the Stevedore labour inside the hatches Were discharging torn and slack bags without mending them with the result that a lot of sugar Was

lost during the movement of the bags from the hatches to the wharf. On the question of Weight the learned Judge points out that the bill of lading

while giving the number of bags and the total Weight of the contents"" also contains the words ""weight and contents unknown "" The learned Judge

Would not give any weight to a certificate Exhibit P. 25 showing that each bag of sugar contained 2 cwts. and further considers it not proved.

Learned Counsel for the plaintiff states that no objection was taken to the proof of this document and that it was not the case at trial that goods

Were not loaded as per invoice. Now the bill of lading gives the number of bags shipped and about that number there can be no doubt. Clearly

414 bags have not been delivered to the consignee and having regard to the Weight of the bags in torn or slack condition an inference may be

drawn, if the other circumstances Warrant that the bags not delivered whole and in proper condition contained contents similar in weight to those

properly delivered. May be the learned Judge in the view he had taken on the legal issues has not referred to all the available evidence on the

matter and the several aspects which do call for consideration, if the liability has to be definitely fixed. True, some damage could have occurred in

the premises of the Port Trust after landing. A question will arise whether notwithstanding Section 39 (3), the ship-owner or carrier could be made

liable for the same. We need not go into these questions now and here. That there has been carelessness in the handling of the goods on board

and, after landing is apparent from the records. It is unfortunate that even formally the Port Trust has not been made a party to this suit and the

claim against it has been allowed to get barred by limitation in endless correspondence. It may be that the Port Trust is a statutory Corporation, but

that does not absolve it from liability for the loss if any for which it is answerable to the Union Government.

It is contended for the plaintiff that even if other defendants are not liable, as the "" disponent owners"" of the Vessel in relation to the charterer

third defendant, the first defendant was in the position of the ship-owner and liable as carriers. It is contended that only in respect of loss and

damage, which may occur after, the goods had been taken charge of by the Port Trust, the Port Trust may be proceeded against and that the

records of discharge and delivery establish that 6,807 bags Were discharged in a slack condition and 747 bags in torn condition. There were 420

bags, sweat-stained. The total tonnage was in 90,799 bags and only 83, 831 bags it is stated Were delivered in sound condition. Before the

learned Judge the plaintiff stated that they will not be pressing their claim for deterioration in quality in the case of sweat-stained sugar. However,

claim for damages Were persisted in respect of shed-sweepings because the shed-sweepings were an admixture, of dirt and foreign matter in large

measure.

Though there is a specific issue No. 11 on the question whether the first defendant are not ""disponent owners"" or carriers of goods, there is no

discussion of this question in the judgment under consideration. In the charterparty between the first defendant and the third defendant, the first

defendant are referred to as the ''disponents '' of the ship called S.S. ''Indore''. The other terms of the charterer are practically Identical With the

terms of the charter in favour of the first defendant from the fifth defendant. In both the charter parties one finds the following clauses:

Charterers '' liability to cease when cargo is shipped and Bills of lading signed, except as regards payment of freight, dead freight and demurrage, if

any.

In both the charter parties it is covenanted:

Ship to be responsible for any quantity short delivered of signed Bill of lading quantity.

Excepting the use of the word '' disponents '' in the charter-party with regard to the third defendant, there is little difference in the covenants in

the two Charter-parties, This aspect of the matter is emphasised by both the parties. But '' disponent '' or '' disponent owner'' is riot statutorily

defined anywhere, nor was our attention drawn to any decided case or standard legal treatise, where the rights and liabilities of the disponent

owner are set out. The reference to '' disponent''"" or "" disponent owner "" in Scrutton on Charter Parties does not give any lead in the matter for

holding merely from the expression diponent found in the second charter-party, that the first defendant must be deemed to be the ship-owner for

purposes of the voyage. Scrutton classifies charter parties under three main categories thus:

(i) Charters by demise (ii) time charters (not by way of demise) and (iii) voyage charters. The last category is most commonly concerned with

charters for a single voyage....Categories (ii) and (iii) however, both differ from category (i) in the important respect that the owner remains under

them in possession of his ship with all the important legal consequences that flow therefrom.

There is a footnote that the modern tendency is against the construction of a charter as a demise or lease. At page 30 in Scrutton (17th Edition) it is

observed that the description of a person in a charter-party as ""charterer"" or "" disponent owner ""'' is not inconsistent with his contracting as agent

for another and therefore, the real principal may prove the agency and sue in his own name. In Carver on Carriage by Sea (Vol. 1), 11th Edition,

the footnote in page 887, refers to the case of a chartering of a ship from "" disponent owners."" who were a company managing the ship for the

owners. The report cited is not available. That the parties laid much stress on the expression "" disponent owners "" is apparent from the pleadings.

While the plaintiff asserted the liability of the first defendant on the basis of his being the disponent owner and carrier of the steamer, the first

defendant''s understanding of the claim is apparent from his plea in para. 4 of the written statement.

The said charter-party (the one in favour of the first defendant from the fifth defendant) was only a voyage charter and not a charter by demise and

therefore, the charterers had no control or possession of the vessel and the Master and the crew of the vessel Were the servants and agents of the

owners of the vessel. There is, therefore, no privity of contract between the plaintiff and this defendant. It is only in cases where the charter

operates as a demise or a lease of the ship-itself and the charterer for the time being becomes the owner of the Vessel that the charterer can be

considered to be a disponent owner. The charter in question Was not a charter by demise, but was only a voyage charter as stated already.

It is not clear from this whether the first defendant understood that where the charterer is the disponent owner of the Vessel the charter is a

charter by demise. If it is a case of charter by demise of the ship then of course, the first defendant would be a carrier and liable as such.

If the charter-party is such as to give the charterer possession of the vessel as well as the right to use her carrying capacity, so that the vessel is, in

effect, let to him, and the master in charge of her is his servant, then the owner is not in the position of a carrier, either as regards the charterer or

anyone else, and there is no reason for regarding the master as actually, or presumptively, his agent in contracting With shippers. (Carver-Carriage

by Sea (Vol. 1), 11th Edn-page 408.)

As stated earlier the second defendant the agent of the first defendant would aver that the first defendant are '' disponent owners '' of the vessel.

The fifth defendant denies that the first defendant were '' the disponent owners '' of the vessel and admits, that he is the owner. We may state that

before us the same Counsel represented defendants 1, 2 and 5 and his case is that the liability, if any, as shipowner is that of the fifth defendant and

not of the first defendant. Learned Counsel for the defendants would contend that a reference to the two charter-parties and how the respective

rights and liabilities of the parties Were understood as made out in the evidence, Would show that the first defendant Was merely an ordinary

charterer, the third defendant being a sub-charterer. We feel that having regard to the pleadings and the emphasis laid by the parties on the

expression "" disponent owners "" the matter has not received adequate consideration and cannot be properly disposed of now on the materials

before us here is a technical Word relating to Maritime law and it appears to have acquired a special meaning. Whether the original charter is by

demise or not, cannot in this case be inferred just by a construction of that charter having regard to the importance of the question, We do not think

that justice Would be done by by-passing the issue. The questions raised in our view, in this case are of some importance. As pointed out earlier, a

specific issue was raised touching this aspect of the question, and Counsel on both sides feel that if an opportunity is given, they would be able to

place adequate materials for a determination of the question. We think that in fairness to the parties and in the interests of justice, it is necessary

that an opportunity should be given to clear up this part of the case. The plaintiff''s whole case rests upon this plea and we do not think we would

be Justified in rejecting the claim on the simple ground that at the trial the plaintiff does not appear to have invited a specific decision on the

question. Ex facie the parties attached considerable importance to the term. The second charter-party does contain the expression that the first

defendant was the disponent of the ship. We are not satisfied that merely on this description without anything more, we can as contended conclude

that the first defendant is the carrier and shift, the liability from the fifth defendant to the first defendant. On the other aspect of the question,

regarding short-landing also, the learned Judge has proceeded on the erroneous basis that the Port Trust is the agent of the consignee. We,

therefore, think it is desirable that the entire case is remanded back for fresh disposal on the merits.

In the result, the judgment and decree dated 30th March, 1961 in C.S. No. 97 of 1966 are set aside and the case is remanded for fresh

disposal in the light of .the observations contained herein. The taxed costs of the suit as Well as the costs of this appeal will abide the result and be

provided for in the ultimate decree that may be passed. In the appeal one set of fees for all the defendants 1 to 5 only is allowed. Court-fee paid

on the memorandum of appeal Will be refunded.