Western India Prospecting Syndicate Ltd. vs The Bombay Steam Navigation Co. Ltd.

Shah, C.J.—The opponent, The Bombay Steam Navigation Co. Ltd., had contracted to carry fifty cases of medicinal castor oil, ex-Bombay harbour to Bhavnagar on 13-9-1948 as per bill of lading of the same date, booked by the Swastik Oil Mills Ltd., Bombay. Of these, 47 cases were delivered on 8-10-1948 and one case on 19-10-1948 to the plaintiff, who is an agent of the Swastik Oil Mills, and the remaining two cases were found missing. The plaintiff sued to recover the value of the said two cases after giving a notice to the defendant company on 10 11-1948. The defendant company opposed the claim on various technical objections but all of these excepting one were overruled by the trial Judge. The one which was upheld was that the requirements of condition No. 19 of the bill of lading had not been complied with inasmuch as the notice had not been given within fourteen days of the date when the goods should have been delivered, and that the defendant company was consequently exempted from liability for the claim. The trial Court, therefore, dismissed the suit with costs and against this decree the plaintiff has come up in revision.

Mr. Mankad for the applicant has urged at the outset that the Carriage of Goods by Sea Act (XXVI [26] of 1925) was not made applicable to Saurashtra until 25-4-1949 and that as the transaction in suit was of a date prior to the application of the said Act to Saurashtra, the rights of the parties will not be governed by the provisions of the said Act. The contention is not correct. The contract for the carriage of the goods had taken place at Bombay between the parties who were residents of Bombay, and it was subject to the conditions of the bill of lading, one of which was that all the terms, provisions and conditions of the Indian Carriage of Goods by Sea Act, 1925, and the Schedule thereto were to apply to the contract contained in the bill of lading, and the Company was entitled to the benefit of all privileges, rights and immunities contained in such Act and the Schedule thereto as if the same were herein specially set out. This obviously meant that the contract for the carriage of the goods in suit was to be determined by the terms, provisions and conditions of the said Act. Such a contract is perfectly valid, and the rights of the parties will, therefore, be governed by the provisions of the said Act. A similar contention urged in Orient Ship Supply Co. Ltd. v. Kalamarsand Co. AIR 1951 Ker 1, was rejected. The contract here having been definitely entered into with an express stipulation that the provisions of the Indian Carriage of Goods by Sea Act of 1925 & the Schedule thereto were to apply to the contract, it is not open to the plaintiff, who is an assignee of the consignor, to plead to the contrary, and this contention must accordingly be rejected.

The next contention urged for the applicant, and that is the main contention, is that condition No. 19 of the bill of lading was ultra vires inasmuch as it was repugnant to and contravened the requirements of Article 3, Clause (6) of the Schedule to the Indian Carriage of Goods by Sea Act. The said clause provides that unless notice of loss or damage and the general nature of such loss or damage is given in writing to the carrier or his agent, here the defendant company, at the port of discharge before or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, or if the loss or damage be not apparent, within three days, such removal shall be prim a facie evidence of the delivery by the carrier of the goods as described in the bill of lading, and it further provides that in any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or, which is important, the date when the goods should have been delivered. Clause (6) thus contemplates the giving of a notice though it is not obligatory and if the notice is not given before or at the time of taking delivery of the goods or, if the loss or damage is not apparent within three days, the presumption will be that the goods were delivered in accordance with the bill of lading. That notice relates to the short delivery of or damage to the goods and has no reference to the claim for the value thereof, and the notice not being obligatory the consignor of his agent could still sue for the value of the goods provided the suit is brought within one year o the date when the goods should have been delivered. Condition No. 19 of the bill of lading contains an altogether different provision, viz. that in all cases not provided for by Clause 6, Article 3 of the Act, notice in writing of every ''claim'' of whatsoever kind or nature shall be given to the Company within fourteen days of the date when the goods should have been delivered, and in default the company shall be exempted from liability for such claim. The notice under this condition relates to the making of a claim and is different from the notice under Clause 6 of Article 3 which relates to the loss as for instance short delivery or damage to the goods. Condition No. 19 has thus nothing to do with Article 3, Clause 6 and in fact it does not apply to cases provided for by the said clause, and no question of its being inconsistent with the said clause, and on that account of its being ultra vires, there fore arises. The said condition does not also seek to exonerate the Company from liability altogether, but it merely prescribes the time limit; within which the claim is to be made by way of notice. Such a provision is not inconsistent with Clause 8 of Article 3, which prohibits any agreement in a contract of carriage relieving the carrier from liability for facts or damage altogether, and says that such an agreement shall be null and void and of no effect. Condition No. 19, as I said, does not attempt to relieve the Company from liability for loss or damage altogether, and it does not, therefore, contravene Clause 8 of Article 3. It is open to the Company to proscribe the conditions under Article 7 of the Schedule as to the responsibility and liability of the Company for the loss or damage to the goods carried and as the conditions of the bill of lading have been framed in pursuance of the said Article 7 of the Schedule, they are quite valid.

Mr. Mankad has urged that the condition exempting the Company from liability in case notice was not given within fourteen days of the date when the goods should have been delivered is an agreement in restraint of legal proceedings u/s 28, Contract Act, and was therefore void. That section provides that an agreement restraining a party absolutely from enforcing his rights under a contract is void, and it does not apply to cases where there is no absolute restraint against enforcing the rights. Condition No. 19 does not restrain a party from making a claim in a Court of law in respect of the loss or damage, but it only exempts the Company from liability in case a notice of the claim is not given within fourteen days from the due date. In Haji Shakoor Gany Vs. H.E. Hinde and Co. Ltd., the condition was as follows:

In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered,

viz., similar to one of the sub-clauses of Article III, and it was held that the effect of the incorporation of this condition in the bill of lading was that the rights of the plaintiff were extinguished in respect of the claim made after one year, and as the plaintiff had no rights to enforce there was no question of the remedy being barred and Section 28, Contract Act, did not assist the plaintiff. In. Shakoor Gany Firm v. Firm of Volkart BrOrs. AIR 1931 Sind 124, it was observed:

It is equally well settled that the duties and liabilities of a common carrier by sea are governed in India by principles of the English law, on that object, and that notwithstanding some general expression in the Chapter of ''Bailments a common carrier''s responsibility is not within the Act 1872. Assuming therefore for the moment that the incorporation in a bill of landing of the conditions of the Carriage of Goods by Sea Act, 1924, in compliance with the mandatory provisions of Section 3 of that Act, stand on the same footing as a voluntary agreement between the parties, and that one of such conditions, namely, that referred to above, is contrary to the provisions of Section 28, Contract Act, the validity of such a condition would depend in this case upon the English Law in view of the principles stated above and not upon the provisions Section 28, Contract Act. This in itself in a sufficient answer to the first point. But there is no ground for making the assumption contended for. In the first place, a statutory provision declaring the terms on which the parties are deemed to have entered into a contract stands on quite a different footing than a term of a contract voluntarily agreed to by the parties. In the next place, the clause in question does not purport to limit the time within which the holder of a bill of lading may endorse his rights against; the carrier; but it goes much further. It extinguished the right itself which is there by not only not enforceable by the usual legal proceedings in the ordinary tribunals within the meaning of Section 28, Contract Act, but is irretrievably lost.

This decision was confirmed in appeal: Haji Shakoor Firm v. Volkart Bros AIR 1937 Sind. 11. Section 28. Contract Act, therefore, does not assist the plaintiff.

Mr. Mankad has made a feeble attempt at showing that the defendant Company''s man had promised to search for the missing two cases and had asked the plaintiffs to wait for twenty days, and that the notice given on 10th November was therefore within the time prescribed. Apart from the fact that this allegation has not been substantiated the contention cannot be entertained because the provisions of condition No. 19 must be construed strictly and they cannot be allowed to be extended by vague or indefinite arguments or pleas. The notice under the condition has to be given within fourteen days of the date when the goods should have been delivered, and this expression means the date on which the goods were due to be delivered. In the present case that was on 8-10-1948, and the notice was obviously beyond the fourteen days'' limit. That being so, the Company was exempted from liability and its claim has been properly dismissed. The application fails and is dismissed with costs.