2000 Supreme(Bom) 286

IN THE HIGH COURT OF BOMBAY
F.I. Rebello, J.
Mahajan Silk Mills Pvt. Ltd...... Plaintiff.
Versus
M.V. MSC Elena, a motor ship flying the flag of
Panama and registered at the Port of Panama..... Defendants.
Notice of Motion No. 189 of 2000 in Admiralty Suit No. 32 of 1999, decided on 10-4-2000.
Advocates appeared :
P.S. Pratap, for defendants in support.
V.C. Kotwal with V.R. Dhond i/by Mehta Laljee Co., for plaintiff to show cause.

Headnote:Carriage of Goods by Sea Act, 1925

       Damages for wrongful release Of goods-Art. 3 Rule VI r/w Arts. 7 and 8.-A suit was filed for damages for the wrongful release of goods which was defended to be dismissed being barred by limitation as per Art. 3 Rule VI of the Act 1925. The pleas in the suit was taken that the loss occurred to the events took place after the discharge of the goods but the contention and defence was that the suit was filed during the period of carriage. Since the matter is of evidence to be decided in trial Court to the effect whether there was any agreement for the liability of the slipper and consignee for the loss so happened.

       However, this clause forms part of the Rule 6 of Article III of the Carriage of Goods by Sea Act. We shall, therefore, examine whether on the pleaClings as they now stand, the suit as filed has to be dismissed on the ground that it was not brought within one year from the delivery of the goods or the date when the goods should have been delivered. It is important therefore to note the meaning of the expression "delivery of the goods or the date when the goods should have been delivered". As reproduced earlier, the liability of the carrier stands extinguished if the liability in respect of the loss or damage is not brought about within one year after the delivery of the goods or the date when the goods should have been delivered. Article VII then provides that nothing contained in the rules prevents a carrier or a shipper from entering into any Agreement, stipulation, condition, reservation or exemption as to responsibility and liability of the carrier or the ship for the loss or damage to or in connection with the custody and care and handling of the goods prior to the loading and subsequent to the discharge from the ship on which the goods are carried by sea. In other words, it will have to be examined whether the bill of lading and/ or agreement contains a provision between the carrier and the shipper in the matter of liability for loss or damage occasioned before loading and after discharge. Naturally, this will be the subject matter of evidence and cannot be disposed of merely on the pleadings and documents as they no stand.

       This would have been sufficient by itself to dispose of this Notice of Motion as the Defendants have come to the Court based on the contention that the Plaintiffs have sued during the period of carriage. Admittedly as per the pleadings, the loss occasioned is on account of subsequent events to discharge of the goods.

       The first judgment is of the Judicial Committee of the Privy Council in Salmond and Spraggon (Australia) Pty. Ltd. v. Port Jackson Stevedoring Pty. Ltd., 1980 Vol. 2 p.c. 317. Once of the issues that arose was as under:

       "That the bill of lading ceased to have any operation after the goods passed over the shipss rail (the "capacity" point)."

       This particular clause is known as "capacity" point. The privy Council dealing with the capacity point was pleased to observe on the facts of that case that when the loss occurred, the goods had been discharged and were no longer in the custody of the carrier. Consequently, the appellant was acting not as an independent contractor employed by the carrier to perform the carriers obligations under the bill of lading but as a bailee. His liability, in that capacity, was independent of and not governed by any of the clauses of the contract. Thereafter, various clauses have been reproduced. The Privy Council, thereafter, went on to observe as under:

       "These provisions must be interpreted in the light of the practice that consignees rarely take delivery of goods at the ships rail but will normally collect them after some period of storage on or near the wharf. The parties must therefore have contemplated that the carrier, if it did not store the goods itself, would employ some other person to do so. Further more, a document headed "Port Jackson Stevedoring Pty. Ltd. Basic Terms and Conditions for Stevedoring at Sydney, N.S.W." showed that it was contemplated that the appellant would be so employed. These practical considerations, which are developed in the judgment of the Chief Justice, explain the somewhat intricate interrelation of Clause 5 and 8."

       After so observing the Privy Council went on to hold that irrespective of the period of carriage defined by the contract, the immunity of the carrier is not co-extensive with this period but extends both before and after it. In other words the clause pertaining to recovery for the loss occasioned has not been restricted on loading and discharge of the goods, but also before and after that period.

       On the other hand the Federal Court of Malaysia in Rambler Cycle Company Ltd. v. Peninsular and Oriental Steam Navigation Company, 1968 Vol. 1 Lloyds Law Reports page 42, the issue, which has arisen here had similarly arisen in that matter. The question before the Court was as under:

       "The real question here is as to the extent of that ambit and so to what liabilities the limitation contained in Art. III applies, or at any rate whether it applies to the liability which has been incurred by the present appellants."

       The Malaysian Federal Court in that case, held that Article III Clause 6 would apply only, during the period of carriage namely between loading of the goods and their discharge. The limitation for claiming for loss or damages other than during carriage would be as per the ordinary law of limitation and not the limitation as contemplated by the Carriage of Goods by Sea Act, 1924 as applicable in the Union of Malaysia.

       A plaint can be rejected if there be no cause of action or even if it ex facie shows that the suit is barred by limitation.

       However, as pointed out earlier, the judgment of the Judicial committee of the Privy Council has taken the view considering the capacity point that the liability does not cease at the time of undertaking. The Malaysian Federal Court has taken the view that after the goods are discharged, it is ordinary law of limitation which would apply. If that be the case, the suit filed would be within limitation. This cannot be decided on the pleadings as they stand.

       Section 28-Restraint of legal proceedings-Clause 21 of Bill of lading restricting the time for filing suit against discharge of carriers liability would be prima facie void and inoperative considering Section 28 of the Act 1972. Any agreement as such, restraining the legal proceedings would be void and illegal.-Let me first deal with the second contention namely that the terms in the Bill of lading extinguishes the right of the Plaintiffs to file a suit if not filed within one year after delivery of the goods or when goods should have been delivered. Let me at this stage straight away refer to Section 28 of the Indian Contract Act as now amended by Amendment Act No. 1 of 1997 and which has come into force on 8th January, 1997.

       It is, therefore, clear that a clause of limitation in the Agreement to reduce the time limit for enforcement of rights or extinguishment of rights, would be void except those covered by the exception clauses. Clause 21 of the Bill of Lading reads as under : "Notice in writing of loss or damage must be given to the Carriers agent at the Port of Discharge of Final Destination at or before removal of the goods supported by invoices and survey, if any. In any event, the Carrier shall be discharged from all liability if suit is not commenced within one year after delivery of the goods or the date that the goods should have been delivered."

       This clause considering Section 28 of the Indian Contract Act would therefore be prima facie void and inoperative to the extent that it limits the time to institute the suit or it extinguishes the right of the Plaintiffs to file the suit.