1975 Supreme(AP) 219

Andhra Pradesh High Court
Judges : ALLADI KUPPUSWAMI, B.P.JEEVAN REDDY
Shipping Corporation of India Ltd., Bombay - Appellant
Versus
Union of India - Respondent
Decided On : 11-07-75

The issuance of a receipt under sub-section (2) of Section 42 of the Major Port Trusts Act, 1963 discharges the carrier from any liability for the loss or damage to the goods (occurring thereafter) towards the consignee and the Port Trust becomes liable for the said goods from the date of the said receipt to the consignee.

Headnote:

MAJOR PORT TRUSTS ACT, 1963 - SECTIONS 42, 43 - INTERPRETATION - CONSTRUCTION OF SECTION 120 - FACT OF THE CASE, FINDING OF THE COURT, ISSUES, RATIO DECIDENDI AND FINAL DECISION - KEY LEGAL PRINCIPLE - CATEGORY AND SUB-CATEGORY OF JUDGEMENT

Fact of the Case:

The Union of India filed a suit for recovery of a sum of Rs. 74,216-65 Ps together with interest thereon at 6 per cent per annum form the date of the suit till the date of realization against (1) the Shipping Corporation of India Limited, Bombay, represented by their agents; (2) Messrs. A. V. Banorirao Garuda Pattabhiramayya and Company, Visakapatnam and (3) The Board of Trustees for the Port of Visakhapatnam by its Chairman. According to the plaintiff a consignment of 81,632 bags of Ammonium Phosphate with 817 spare bags was received on Board S. S. Viswakirti owned by the first defendant at the Post of Pascagoula, Mississippi, U. S. A. , on 28-8-1966 and under a Bill of Lading of the same date thereunder the first defendant agreed to deliver the said goods to the consignee namely the Regional Director (Food) or his assignees at Visakhapatnam in good and proper condition. The second defendant is the shipping agent of the first defendant. On 26-10-1966, the said ship arrived at the Post of Visakhapatnam and commenced its discharge of the cargo on 8-11-1966 and completed the same on 22-11-1966. But when the consignee went to take delivery to the Port, it was found that 2133 bags along with their contents were totally missing and 718 bags were found to be in a slack, torn and bad condition. The third defendant issued a A certificate dated 16-5-1967 certifying that 2133 bags with their contents were not at all landed at the Port. It was also stated that some of the empty spare bags were also not delivered. The total loss incurred by the plaintiff on this account was demanded by a letter dated 18-3-1967 addressed to the second defendant to which it was replied that the said bags were discharged by the said ship into a steel Barge owned by the third defendant on 9-11-1966 and that the said Barge while proceeding to the Port met with an accident and sank along with all its contents. It was claimed by the second defendant that inasmuch as it has delivered the cargo to the third defendant its responsibility came to an end and it was also pointed out that at is instance the third defendant has subsequently cancelled the A certificate issued by them, and confirming that the said steel Barge had sun at Q-4 Berth. The second defendant asked the plaintiff t look to the Port Trust for any loss or damage incurred by it and disclaimed any responsibility in that behalf. The plaintiff however contended that the second defendant cannot escape the liability inasmuch as the delivery of the bags to the third defendant is no delivery to the consignee as undertaken by the defendants 1 and 2 under the Bill of Lading and that the third defendant cannot be called an agent or representative of the plaintiff. It was therefore contended that the defendants 1 and 2 continued to be liable for the loss or damage and therefore, a decree was sought against them. It was alternatively prayed that if it is found that the defendants 1 and 2 are not liable for the said loss a decree may be passed against the third defendant.

Finding of the Court:

The trial Court found that the suit is not barred either on account of the absence of notice contemplated by Section 43 (2) of the Act or for non-issuance of the notice required by Section 120 of the Act. It was also found that the suit is also within the limitation prescribed by Article III, Clause (6) of the Schedule to the Indian Carriage of Goods by Sea Act, 1925. It was further found relying upon the Union of India v. M/s. Ralli Bros Ltd. , (1968) 2 Mad LJ 199, that merely because defendants 1 and 2 have delivered the cargo to the third defendant, their responsibility as a carrier has not ceased and that according to the terms of the Bill of Lading, they continued to be liable for a proper and full delivery of the consignee in accordance with the said Bill and since admittedly there was a failure to do so on their part, defendants 1 and 2 were liable therefor. It was also found that the third defendant was not acting as the agent of the plaintiff, but they were acting as the agent of the carrier when the cargo was discharged form the ship into the steel barge owned by the third defendant. On these findings, the suit was decreed with cost as prayed for.

Issues: 1. Whether the issuance of a receipt under sub-section (2) of Section 42 of the Act discharges the carrier from any liability for the loss or damage to the goods (occurring thereafter) towards the consignee and whether the Port Trust becomes liable for the said goods from the date of the said receipt to the consignee; 2. What is the object of the notice provided for by sub-section (2) of Section 43 and what is the effect of not giving such a notice on the present suit? 3. Whether the two clauses in Sec. 120 of the Act should be read conjunctively or alternatively.

Ratio Decidendi: 1. Sub-section (7) of Section 42 of the Act has a positive content as construed by a Bench of this Court and that it gives a complete statutory discharge to the shipper/carrier once the goods are delivered to the Board and a receipt is obtained under Section 42 (2) of the Act. The obvious purpose behind enacting Section 42 (7) was to see that the liability of the shipper in every respect including his liability to the consignee is statutorily discharged, the moment the goods are put in charge of the Board and a receipt is obtained by the shipper. 2. The notice contemplated by sub-section (2) of Section 43 should be given a limited meaning in the sense that the notice contemplated therein has to be given to the Board by the shipper/carrier to whom the receipt has been issued and the object of the said sub-section is to decide and dispose of any objections with respect to the correctness of the receipt issued promptly and immediately after the goods are received by the Port Authorities. 3. The two requirements in Section 120 of the Act have to be read conjunctively and not alternatively.

Final Decision: Both the appeals have to be allowed and the suit dismissed. Defendants 1 and 2 are not liable because they have properly delivered the goods to the Board and obtained a receipt under Section 42 (2) of the Act making the Board liable for the said loss. And the suit as against the Board has to be dismissed for non-compliance with the provisions of Section 120 of the Act.