Mishra, J.@mdashIt would have been more in order had these appeals been heard by the same Bench which heard O.S.A. Nos. 181 and 182 of 1985 filed on behalf of the Port Trust against the impugned judgment, but these appeals by the first defendant/Carrier, have been listed after the said two appeals have been heard by another Bench (Mishra, J. and Padmini Jesudurai, J.). We are informed that judgment in the said two appeals has not yet been delivered.
2. The two plaintiffs, viz. the consignee represented by their power of Attorney Agent and National Insurance Company Limited have filed the suits C.S. Nos. 209 and 210 of 1980, alleging inter alia that the first defendant/Carrier, or the ship known as M/s. Gold Star Line Limited, incorporated in Hongkong, carried consignments of a merchant at Bangko to the first plaintiff, they being 4,000 bags of greengram and another 2,000 bags of greengram, to the same destination, Madras. The consignments were insured with the second plaintiff National Insurance Company Limited. The vessel ''M.V. Gold Leaf carrying the two consignments arrived at Madras on 26.8.1979. The landed cargo was not stacked markwise and the marks were also missing on number of bags and, therefore, the consignment could not be delivered in full. The 1st plaintiff in C.S. No. 209 of 1980 was given delivery of 2,207 out of 4,000 bags, leaving a shortage of 1,793 bags. The 1st plaintiff in C.S. No. 210 of 1980 was given delivery of 1,340 out of 2,000 bags, leaving a shortage of 660 bags.
3. On complaint the first defendant-carrier alleged that they had landed the entire manifested quantity and that it was in the custody of the second defendant, Madras Port Trust, which could not deliver the goods according to the marks. On claim by the first plaintiff, the second plaintiff as insurer has settled the claim for Rs. 3,26,830.50 being the value of the goods short delivered. In view of the subrogation, the suits are filed by both the plaintiffs, claiming the invoice value of the goods with interest.
4. The first defendant, who is common in both the suits, filed a written statement, stating that the Carrier was not aware of the condition and the quantity of the cargo entrusted at the Bangkok Port, that the cargo was duly discharged at Madras to the custody of the second defendant, Madras Port Trust, who issued tally receipts, and that, therefore, the liability, if any, of the Carrier had come to an end once the cargo is discharged from the vessel. It denied any short-landing and stated that if there was any shortfall, it was perhaps due to the cross-deliveries effected by the second defendant.
5. The second defendant filed a written statement alleging that though the goods were shown as landed in the tally sheets, the quantity that was actually lying under the marks was much less. The black and greengrams were not landed mark wise and all the bags were landed in a mixed up condition. Further, the goods were in bad condition, and were packed in a single gunny and, therefore, there was heavy spillage at the time of landing. The first plaintiff refused to take delivery of the heap shown to them and therefore, the same was out turned as excess landed and a ''B'' certificate was issued to the plaintiff.
6. D.W.I, the agent of the first defendant carrier, in his deposition stated that the goods quantity wise landed at Madras Port completely and that most of the cargo were mentioned under marks, but in specific cases, a large number of bags have been mentioned under ''various'' marks; the mark ''various'' means that several marks of the items landed together which were not segregated separately and that is why they were classified so. He stated that the segregation was done by the Port labourers at the cost of the shipper and the goods were discharged markwise, but the second defendant had carried it under ''various'' mark It is on record that the first plaintiffs agents requested the Shipper to cause a survey of the goods landed under ''various'' mark since they were in a damaged condition in the sheds. The first defendant did not make any survey though admittedly it was a part of its duty (vide, the admission of B.W.1). The evidence of this witness is significant with respect to the goods landed in so tar as he has admitted that the cargo landed in a mixed up condition and on landing those goods which did not have specific marks were branded as ''various'' and as per the out-turn statement Ex.D-5 issued by the Port Trust, the contents of 2,453 bags were lying in one lot as a heap under ''nil'' mark. Since the tally statement and the out-turn statement contradicted each other, the Port Trust issued ''B'' certificate as if the cargo had short landed.
7. The Ship Master at Madras Port Trust was examined as D.W.2 and he stated that the manifested quantity that arrived through the vessel on 26.8.1979 was 52,100 bags out of which the second defendant had delivered a total quantity of 49,647 bags. He staled that the consignor used only one single gunny bag and that some of the bags arrived in torn condition. Referring to Ex.D-9, he stated that the goods were received in mixed up condition ''cover torn and contents falling out''. Goods marked ''various'' also landed. He stated that 3,797 bags under ''various'' mark and 1,898 bags under ''nil'' mark were annotated as ''cover torn and contents falling out. According to him, the steamer agent stacked it in a mixed up condition and was liable for it and the agent of the first defendant was also a party to the tally sheet which recites that the goods landed in a mixed up and damaged condition with cover torn, etc. The carrier look the goods from the wharf to the shed by their own transport utilising their own men and labour for unloading etc. Because the steamer agent stacked it in a mixed up condition, the first plaintiff could not identify the goods and, therefore, according to D.W.2 the goods were not removed.
8. On the basis of the above and on the consideration of the other evidence on record, a learned single Judge of this Court has found as follows:
...in the face of the evidence on record, there is no difficulty in finding that the 1st defendant had not delivered the entire cargo in apparent good condition in conformity with the Bill of Lading and consequently the liability of the 1st defendant does not come to an end once the cargo is discharged from the vessel. The evidence also clearly establishes that the specific marks in the manifest were absent when the goods were tendered for delivery. There is also discrepancy between the tally sheet and the out-turn statement. We have already found that the annotation in the tally sheet is ''cover torn and contents falling down''. The tally sheet itself is prepared by the Port Trust in the presence of the 1st defendant''s agent and it is an internal arrangement between the defendants. The consignee does not at all come into the picture at that stage. It would appear that for the sake of easy and quick disposal of the enquiry, the Port Trust more often issues ''B'' Certificate as if the goods short landed and they show it as ''Excess landing" when the landed goods do not conform to the description in the invoices or in the Bill of Lading. The issue of ''B'' Certificate is perhaps the easiest way by which the Port Trust seeks to avoid the liability or the claim by the consignee. On the other hand, by showing ''excess landing'' under the ''B'' certificate, the Port Trust standing to gain since it sells the claimed goods and appropriates the same for itself. In my opinion, the issue of ''B'' certificate by the 2nd defendant was not at all justified as it is clear from the evidence that there was no short landing or even excess landing. The consigned goods arrived in full. But, some of them did not conform to the description or did not contain the marks or arrived in a damaged condition. It is also clear from the evidence that there was mixing up of greengram and blackgram and the ''markings'' also did not tally. This is clearly due to the negligence or misconduct on the part of the workers and the lower officials in the Port Trust on the spot, who actually supervise the unloading and stocking of the goods. For no fault of his, the consignee is now put to loss and admittedly these two quantities of short deliveries cannot at all be denied. The consignee cannot be compelled to take whatever is offered to him in whatever condition. I am satisfied that the short delivery is on account of the negligence and misconduct on the part of the agents and servants of both the defendants.
It is on the basis of the finding that the issue of ''B'' certificate by the second defendant was not at all justified that the learned single Judge found that there was no short landing or even excess landing and that the goods arrived in full.
9. Learned Counsel for the appellant has contended that the learned single Judge has committed an error of law in holding the carrier responsible for loss to the consignee. He has drawn our attention to Section 39(3) of the Madras Port Trust Act as well as Section 42(7) of the Major Port Trusts Act to contend that the ship owner''s liability ended with delivery of goods in full with the Port Trust, an argument which was advanced with vehemence before the learned single Judge but negatived in these words:
The law on this aspect is well-settled by a Division Bench of our High Court in Union of India v. Ralli Bros. Ltd. (1968)2 M.L.J. 799, wherein it. has been held that ''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''. The decision in Steel Authority of India v. Indian Steam Ship Co. by Agent 1979 T.L.N.J. 196, was also placed before me for the proposition that the mere issue of tally certificate does not absolve the liability of the carrier and that the ''markings'' on the goods are necessary for their identification. In the second cited decision, Padmanabhan, J., held that ''the issue of tally sheet by the Port Trust to the ship owner is a matter of internal checking between the ship owner and the Port Trust and it does not bind the consignee and that the fact that the ship owner has obtained a certificate from the Port Trust u/s 39(3) of the Port Trust Act will not amount to an absolute discharge of the ship owner of his liability to deliver the cargo to the consignee. It was further held that the consignee was given a ''B'' certificate will be conclusive proof that the goods conforming to the Bill of Lading had not been landed at the Madras Port. In the face of these decisions and in the face of the evidence on record, there is no difficulty in finding that the 1st defendant had not delivered the entire cargo in apparent good condition in conformity with the Bill of Lading and consequently the liability of the 1st defendant does not come to an end once the cargo is discharged from the vessel.
At another place while dealing with issue of ''B'' Certificate, the learned single Judge has observed:
The consigned goods arrived in full. But, some of them did not conform to the description or did not contain the marks or arrived in a damaged condition.
10. In a Division Bench judgment of this Court in
The first defendant in the suit chartered the ship on the 4th April, 1955 (Ex.D-1) as the charter party specifically for a full complete cargo of refined sugar in bags not exceeding 9,450 long tons, not less than 9,000 long tons nett 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, Ex.D-3 being the relative bill of lading. The ship arrived at Madras on 19th October, 1955 and it commenced to discharge the cargo on 27th October, 1955, and the discharge of the cargo was completed, it is stated on 8th November, 1955. According to the plaintiff, there was short landing of 414 bags of sugar weighing 1.41.8.0.0 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 1.86.13.3.4. 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 shad-sweepings giving a weight of 1.76.12.2.25.
On the merits while holding that 414 bags had not been delivered to the plaintiff by the Port Trust, the learned single Judge of the Court 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 and the Assistant Traffic Manager of the Port Trust admitted that the entire quantity was landed and that the tally-sheets were correct. The learned single 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 in the words of the Division Bench ''purported'' to follow certain earlier decisions of this Court''. The Bench upon that said:
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.V. Shaik Mohammed Rowther and Co. (1963)2 S.C.R. 915. The legal relationship between the shipowner and the shipper or the consignor and the consignee is thus enunicated in the said decision:
There is no doubt that 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 bailee and the Board is the bailee and the Board''s responsibility for the goods there after 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 upto their delivery in accordance with the terms of the bill of lading.
In
The Bench, however, found that the learned single Judge in the view he had taken on the legal issues had not referred to all the available evidence on the mailer and the several aspects which did call for consideration, if the liability has to be definitely fixed, and observed:
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.
The Bench remanded the case to the trial court for determination of the damages on the basis of the evidence notwithstanding the rule as found in Section 39(3) of the Madras Port Trust Act.
11. In Steel Authority of India v. India Steam Ship Co. by Agent 1979 T.L.N.J.196, a learned single Judge of this Court was dealing with a case in which the vessel at Madras Port discharged part of the cargo, which on inspection by the Customs Authorities was found to be without labels and the markings were not according to the specifications. In some cases, there were no markings at all and in some, the destination was shown as Bombay. The Port Trust issued a ''B'' certificate stating that the 36 parcels shown in the Bill of Lading were not landed by the vessel which arrived in Madras. One of the contentions before the learned single Judge was with respect to the legal effect of Section 39(3) of the Port Trust Act. After referring to the earlier decisions of this Court, the learned Judge stated the law in these words:
What can be deduced from the above decision is that the issue of tally sheet by the Port Trust to the ship owner is a matter of internal checking between the ship-owner and the Port Trust and it does not bind the consignee. The fact that the ship-owner has obtained a certificate from the Port Trust u/s 39(3) of the Port Trust Act will not amount to an absolute discharge of the ship owner of his liability to deliver the cargo to the consignee. In other words, a delivery to a wharfinger or to a dock authority is not in itself sufficient unless the contract provides for such delivery or unless there is a custom to that effect. The responsibility of the carrier for the goods does not cease merely by technical discharge of the goods from the ship and obtaining a certificate from the Port Trust u/s 39(3) of the Port Trust Act, but continues up to the delivery in accordance with the Bill of Lading. Further, the fact that the consignee had given a ''B'' Certificate to the Port Trust will be conclusive proof that the goods conforming to the Bill of Lading had not been landed at the Madras Port.
12. Of the three decisions that learned Counsel for the appellant has cited, one that has been relied upon most is the judgment by a learned single Judge of this Court in M/s. United Bleaders v. South East Asia Shipping Company (P.) Ltd. 1978 T.L.N.J. 35, in which it was held that it was wrong to contend that the liability of the ship owner would extend right upto the time of the actual delivery of the goods to the consignee and that the statutory interposition of the Port Trust between the landing of the goods and their delivery would not absolve the shipowner of his liability. The learned single Judge has in this behalf entered into a discussion of law and observed:
...for this purpose certain passages from the decisions of the Supreme Court in the The Trustees of the Port of Madras by its Chairman v. K.V. Shaik Mohammed Rowther and Co. (1963)2 S.C.R. 915, were relied on. The learned Counsel for the respondent relied on Section 39(3) and also certain other decisions of the Supreme Court as supporting his stand that the carrier was absolved of his liability as soon as he delivered the goods to the Port Trust.
It would be seen that the Supreme Court was concerned with finding out whether the charges could be levied on the ship-owner or on the consignee. It is only in that context that the Supreme Court went into the various provisions to examine whether the Madras Port Trust has been constituted as the agent of the consignee. It was held that the Port Trust was not the agent of the consignee and that the Port Trust did not receive the goods on behalf of the consignee. It does not appear to be proper to take these passages as if they determined the liability of a ship owner when that matter was not and could not have been in issue in that case vis-a-vis the consignee. In
It was held that u/s 39(3) once a receipt was given that a particular consignment had been taken charge, a complete discharge was given to the ship-owner and that the Port Trust was rightly held liable. Consistently with this decision the ship-owner cannot be held liable in this case. There is another decision of this Court in
13. In the above view of the principles of law, according to learned Counsel for the appellant, the instant case is one in which the Port Trust alone could be held liable, as the ship had delivered the goods to it u/s 39(3) and the Port Trust had issued a certificate of discharge to the consignee, with respect to which learned single Judge has to say, the "the consigned goods arrived in full".
14. In M/s. United Blenders v. South East Asia Shipping Company (P.) Ltd., 1978 T.L.N.J. 35, cited supra, the learned single Judge was dealing with a case in which the carrier had delivered all the eight bales consigned safely to the Port Trust and the Court below had held that there was no short-landing. After stating as stated above, the learned Judge has said:
...But as soon as the proper goods were delivered to the statutory authorities interposed between the ship-owner and the consignee, then the delivery to the statutory authorities would absolve the ship-owner of his liability. The question whether the statutory authority is the agent of the ship-owner or of the consignee is not relevant. The statutory immunity given u/s 39(3) is absolute in its terms and is not dependent on the Port Trust being the agent of the consignee. Having regard to the statutory provisions which confer immunity on the ship-owner, it is not possible to hold that the ship-owner continues to be liable notwithstanding the fact that he has delivered the proper goods in their entirety to the Port Trust. If the appellants'' contention were to be accepted, then Section 39(3) would be practically rendered nugatory, as cannot apply to any conceivable situation. In the present case, it is clear from the records that the tally sheets issued to the Master of the ship confirmed the delivery of the 8 bales. The Port Trust delivered to the first only two bales. If there was a short delivery to the consignee, in these circumstances, the ship-owner cannot be blamed thereafter.
15. Learned Counsel for the appellant drew our attention to the following passage in Halsbury''s Laws of England, Volume 3 (Shipping and Navigation), paragraph 639, page 450:
The ship-owner remains liable under his contract until he has made delivery to a person entitled thereto. A delivery to a wharfinger or to a dock authority is not, in itself, sufficient, unless the contract provides for such delivery, or unless there is a custom to that effect.
16. We are in complete agreement with the view expressed by the learned single Judge in M/s. United Blenders v. South East Asia Shipping Company (P.) Ltd. 1978 T.L.N.J. 35, referred to above, that if goods are delivered to the Port Trust in accordance with the contract, the Carrier is absolved of any liability. If, however, it is not so delivered, notwithstanding Section 39(3) of the Madras Port Trust Act or Section 42 of the Major Port Trusts Act, the Carrier shall continue to be answerable and liable under his contract.
17. In the instant case, learned single Judge has taken the correct view of the law on the facts of the case as above when it is admitted that goods were not delivered in full and in accordance with the contract with the first defendant, its liability did not cease on delivery of goods to the Port Trust." We have refrained from making any observations on the liability of the Port Trust, besides that of the appellant herein, for the reason of the matter being in appeal in O.S.A. Nos. 181 and 182 of 1985. Since we have found no error in the judgment of the learned single Judge, these appeals must fail and the appeals are accordingly dismissed. On the facts of these cases, however, there shall be no order as to costs.
