HIGH COURT OF CALCUTTA
S. C. Deb
GREAT EASTERN SHIPPING CO. LTD. - Appellant
Versus
UNION OF INDIA (UOI) - Respondent
Suit 1669 Of 1963
Decided On : AUGUST 14, 1970
CONTRACT ACT - SECTION 70 - COMPENSATION - FREIGHT - JURISDICTION - LIMITATION ACT - ARTICLE 120 - RAILWAY ADMINISTRATION - VALIDITY OF CONTRACT.
Fact of the Case:
Plaintiff, a shipping company, filed a suit against the defendant, the Union of India, claiming Rs. 26,721/- as outstanding balance of freight payable by the defendant with interest thereon in respect of a cargo of coal carried by the plaintiff in Voyage No. 31 by the vessel "Jag SEVAK". The defendant pleaded that the contract of carriage was void due to non-compliance with the provisions of Article 299 of the Constitution and claimed to set off the said sum of Rs. 26,721/- against the claim of the plaintiff.
Finding of the Court:
The court held that the contract of carriage was void for non-compliance with the provisions of Article 299 of the Constitution, but that the plaintiff was entitled to compensation under Section 70 of the Contract Act. The court also held that the defendant was liable to pay the compensation to the plaintiff in Calcutta within the jurisdiction of the court, and that the claim of the plaintiff was not barred by the law of limitation.
Issues: 1. Whether the contract of carriage was void due to non-compliance with the provisions of Article 299 of the Constitution? 2. Whether the plaintiff was entitled to compensation under Section 70 of the Contract Act? 3. Whether the defendant was liable to pay the compensation to the plaintiff in Calcutta within the jurisdiction of the court? 4. Whether the claim of the plaintiff was barred by the law of limitation?
Ratio Decidendi: 1. The court held that the contract of carriage was void for non-compliance with the provisions of Article 299 of the Constitution, as it did not comply with the requirements of the said Article. 2. The court held that the plaintiff was entitled to compensation under Section 70 of the Contract Act, as the plaintiff had lawfully carried the cargo and delivered it to the defendant, and the defendant had enjoyed the benefit of such works. 3. The court held that the defendant was liable to pay the compensation to the plaintiff in Calcutta within the jurisdiction of the court, as the defendant carried on business within the jurisdiction of the court and the compensation was payable by the defendant to the plaintiff in Calcutta within the jurisdiction of the court. 4. The court held that the claim of the plaintiff was not barred by the law of limitation, as the claim was governed by Article 120 of the Limitation Act, 1908, which prescribed a period of 6 years for claims for compensation under Section 70 of the Contract Act.
Final Decision: The court decreed in favor of the plaintiff for a sum of Rs. 26,721/- with interest thereon at the rate of 6 percent per annum from 25th November, 1960 until realization and the plaintiff was entitled to costs of the suit.
( 1 ) THIS suit was filed by the plaintiff with leave under Clause 12 of the Letters Patent on 12th September, 1963, claiming Rs. 26,721/- as outstanding balance of freight payable by the defendant with interest thereon in respect of a cargo of coal carried by the plaintiff in Voyage No. 31 by the vessel "jag SEVAK".
( 2 ) IN the plaint it is, inter alia, alleged that the Chief Commercial Superintendent of Eastern Railway Administration on behalf of the defendant shipped 7730 metric tons of steam coal on board the plaintiff's said vessel "jag SEVAK" for being carried by the plaintiff from the port of Calcutta and for being delivered at the Port of Cochin to the Southern Railway Administration of the defendant. The plaintiff duly carried the said cargo by that vessel under a Bill of Lading dated November 10, 1960 and duly delivered those goods to the defendant's said Railway Administration at the Port of destination on 25th November, 1960. Under the Bill of Lading the total freight payable to the plaintiff was Rs. 2,66,755-50, out of which the defendant through its Eastern Railway Administration paid Rs. 2,40,034-50 p. leaving a balance sum of Rs 26,721/- still payable to the plaintiff.
( 3 ) ON 3rd November, 1963, the defendant filed its written statement, inter alia, pleading that the said contract of carriage was void due to non-compliance with the provisions of Article 299 of the Constitution. The defendant, however, admitted the contents of the Bill of Lading mentioned in the plaint and by way of defence alleged that the defendant had paid Rs. 2,51,818. 87 p. as freight under another Bill of Lading for a different cargo of 7182 tons of coal boarded on another vessel "s. S. JAGJANANI" belonging to the plaintiff for shipment from Calcutta to Cochin. The said vessel "s. S. JAGJANANI" however, ran aground and thereafter the said cargo was off loaded in lighters and out of the total quantity of the said goods only 6784 tons were transhipped by the plaintiff by other vessels which were discharged at different ports, the distances of which were shorter than the original destination. The balance quantity of 398 tons of coal became unsuitable for shipment and were not transhipped at all. In these circumstances, the consideration for the sum of Rs. 26,721/- representing the freight for the said off loaded 398 tons of coal including the difference in freight for not carrying 6784 tons of coals to their original destination have totally failed and the said sum of Rs. 26,721/- became payable by the plaintiff to the defendant in respect of "s. S. JAGJANANI".
( 4 ) IN the written statement it Is further pleaded that the "defendant thereafter duly and with the consent of the plaintiff deducted the said sum of Rs. 26,721/- out of the total sum of Rs. 2,66,755. 50 p. being the freight due to the plaintiff, on account of the aforesaid carriage of coal by the said vessel "jag SEVAK" and the balance sum of Rs. 2,40,034. 50 p. was duly paid up by the defendant to the plaintiff", and "there was full accord and satisfaction in respect of the plaintiff's dues on account of the said freight for the sum of Rs. 2,66,755-50 p. " After pleading that "the plaintiff dispensed with and/or remitted the said sum of Rs. 26,721/-" the defendant, in the alternative, claimed to set off the said sum of Rs. 26,721/- against the claim of the plaintiff and disputed the validity of the Notice under Section 80 of the Code of Civil Procedure and alleged that this Court had no jurisdiction to try this suit.
( 5 ) IN view of the defence as to the invalidity of the contract of afreightment being taken in the written statement the plaintiff after serving a fresh notice under Section 80 of the Code of Civil Procedure applied for amendment of the plaint which was allowed by an order dated 8th August, 1966 by Binayak Banerji, J. By the said amendment the plaintiff inter alia pleaded necessary averments required by Section 70 of the Contract Act and claimed
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