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1981 Supreme(Cal) 376

High Court Of Calcutta
Dipak Kumar Sen
STEEL AUTHORITY OF INDIA LTD. - Appellant
Versus
TRANSWORLD MARINE LTD. - Respondent
Commercial Cause Suit 730  Of  1980
Decided On : 11/04/1981

An agent of a foreign shipping company can be bound by the contract of carriage based on usage and custom of trade, but in the absence of an express contract making the agent liable, the plaintiff cannot sue both the principal and the agent simultaneously.

Headnote:

Agent - Liability in Contract of Carriage - The court held that the agent of a foreign shipping company can be bound by the contract of carriage between the plaintiff and the shipping company, based on the usage and custom of trade, and is privy to the contract. However, in the absence of an express contract making the agent liable, the plaintiff cannot sue both the principal and the agent simultaneously.

Fact of the Case:

The plaintiff shipped a consignment of steel plates on a vessel owned by the defendant No. 1, which sank, resulting in the loss of the cargo. The plaintiff sued both the shipping company and its agent, the defendant No. 2, claiming liability for the loss.

Finding of the Court:

The court found that the defendant No. 2, as the agent of the shipping company, could be bound by the contract of carriage based on usage and custom of trade. However, in the absence of an express contract making the agent liable, the plaintiff cannot sue both the principal and the agent simultaneously. The court directed the removal of the defendant No. 2 from the cause title of the plaint.

Issues: The issues revolved around the liability of the agent in a contract of carriage and whether the plaintiff could sue both the principal and the agent simultaneously.

Ratio Decidendi: The court held that the agent of a foreign shipping company can be bound by the contract of carriage based on usage and custom of trade, but in the absence of an express contract making the agent liable, the plaintiff cannot sue both the principal and the agent simultaneously.

Final Decision: The defendant No. 2 succeeded in its application, and the court directed the removal of the defendant No. 2 from the cause title of the plaint.

DIPAK KUMAR SEN, J.

( 1 ) STEEL Authority of India Limited, the plaintiff, has instituted this suit against Transworld Marine Limited and Messrs. Chowgule Brothers, the defendants Nos. 1 and 2 respectively, claiming, inter alia, decree for Rs. 50,59,365. 48; interests and costs.

( 2 ) THE plaintiff's cause of action in the plaint appears to be that on or about the 13th June 1979 the plaintiff shipped a consignment of 434 pieces of mild steel plates on board the vessel "m. V. Chaofong" owned by the defendant No. 1, a company incorporated under the laws of Taiwan and (hereinafter referred to as the said vessel) for being carried from the port of Kachsiung, Taiwan to Calcutta.

( 3 ) ON the 8th August 1979, the said vessel while proceeding towards the Port of Calcutta sank near the Sandheads at Diamond Harbour and the entire consignment of steel plates were lost. It is alleged that the vessel was unseaworthy and that there was lack of care for the cargo.

( 4 ) THE plaintiff alleges that the defendant No. 2 is the agent of the defendant No. 1 at Calcutta and gave out by conduct and implication to be liable and responsible for the acts of the defendant No. 1.

( 5 ) THE present application is by the defendant No. 2 on notice dated the nth August 1981. In this application it is prayed that the suit be dismissed as against the defendant No. 2 and/or the name of the defendant No. 2 be struck out from the plaint.

( 6 ) THE case of the defendant No. 2 is that the plaint filed discloses no cause of action against the defendant No. 2 and that the defendant No. 2 is not a necessary party to these proceedings. It is alleged further that the defendant No. 1 does not carry on business in India through the defendant No. 2 and that the latter is only the protecting agent of the defendant No. 1 at Calcutta. It is also alleged that there is no privity of contract or any legal relationship between the plaintiff and the defendant No. 2. It is contended further that the defendant No. 2 is not a party to the contract of carriage between the plaintiff and the defendant No. 1 and that it did not sign the bill of lading. The defendant No. 2 was also not responsible for the navigation of the said vessel or taking care of the cargo.

( 7 ) THIS application is opposed. It is contended on behalf of the plaintiff that the defendant No. 1 is a foreign shipping company and carries on business of shipping through its recognised and notified agent the defendant No. 2. It is contended further that in law as well as by usage and custom of trade the defendant No. 2, as the agent of the defendant No. 1, is bound by the contract of carriage between the plaintiff and the defendant No. 1 and is also privy to the contract. The other allegations in the petition have been denied and the contentions disputed.

( 8 ) AT the hearing, learned Advocates appearing for the parties reiterated their respective contentions in the pleading. The learned Advocate for the defendant No. 2 referred to Section 230 of the Contract Act and submitted that under the terms thereof the principal having been sued the plaintiff was not entitled to sue the agent at the same time. He submitted that it was nobody's case that there was a contract by which the defendant No. 2 as the agent of the defendant No. 1 made itself liable to be sued in respect of the said contract of carriage.

( 9 ) LEARNED Advocate for the plaintiff contended to the contrary. In the facts and circumstances of and on the pleadings the plaintiff in my view cannot get over the mischief of Section 230 and sue both the principal and the agent. It is not the case of the plaintiff that by an express contract the defendant No. 2 made itself liable for the contract of carriage. The plaintiff's cause of action is founded on certain representations which, according to the plaintiff, create some sort of estoppel in his favour. Nothing further has been disclosed in the affidavit filed in opposition on behalf of the plaintiff on which

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