The main legal point established in the judgment is the interpretation of Art.3(6) of the Schedule to the Carriage of Goods by Sea Act, which governs the liability for loss or damage and the extinction of such liability. The judgment also clarifies the significance of an independent contract in determining liability and the requirement to prove negligence in a claim for damages.

Defendant is the appellant. Suit was for damages and short delivery of goods.

2. Plaintiff is a Shipping Company engaged in the carriage of goods by sea. In its vessel S.S. Vishwa Raksha, it brought among other cargo, a consignment of steel sheets to the Port of Cochin for the Cochin Refineries Ltd. The vessel arrived at Cochin on 11-10-1967. The defendant was engaged as stevedores for discharge of the said cargo. Discharge operation was completed on 18-10-1967. There were 217 bundles of steel sheets for discharge. The mode of discharge was that each bundle would be tied to a wire sling, lifted from the hatch and discharged to the lighter moored by the side of the ship. For the above purpose, the wire sling with a circumference of 1-" was used. In the course of discharge of the last bundle to the lighter the sling broke and the bundle fell into the lighter. As a result of the impact, the bottom of the lighter gave way and 22 bundles of steel sheets were irrecoverably lost under water. The salvage operation conducted by Port Authorities did not succeed.

3. The plaintiff alleged that the cargo was lost due to the negligence of the defendant in that it used wire sling of the circumference of 1-" instead of 2½ inches for lifting the cargo, and that therefore the defendant was liable to make good the loss. The plaintiff had to pay to the consignee for short delivery of the goods occasioned which was estimated at Rs. 54,185,31, but the plaintiff limited its claim to Rs. 24,000/- for which the plaintiff settled the claim with the under writers on 25-6-1970. The suit was for recovery of this amount, besides Rs. 209.67 paid by the plaintiff to the Cochin Port Trust as charges for salvage operations.

4. The defendant filed written statement contending that they were not liable to compensate the plaintiff as the payment was made to the plaintiff long after liability was extinguished by operation of law. They also denied the averment that the defendant and their employees were negligent in discharging the cargo. According to them, they used proper and sound wire slings and other equipments for the purpose of discharging the cargo and while the bundle of sheets were being lifted and brought out of the vessel and lowered by means of wire sling of circumference of 1-" it was suddenly noticed that the lighter which was waiting to receive the bundle was unexpectedly shifted by the lighterman and its crew. This shifting of the lighter could not have been foreseen by the defendants. As the sling with the bundle already came out of the vessel and was being lowered into the lighter the men handling the sling were compelled to keep the load suspended in air until the lighter was again safely placed in position for receiving the load. While so the sling suddenly twisted and as a result of that, the bundle fell into the boat. The averment that the liability of the plaintiff was kept alive by acknowledgement was also denied. They were not aware of the payment of Rs. 209.67 to the Cochin Port Trust by the plaintiff and the suit was liable to be dismissed.

5. Plaintiff filed a replication reiterating its contentions in the plaint.

6. The trial Court held that the suit was not barred by limitation or extinguishment. According to the lower Court what was to be considered was the question whether the defendant was answerable to the plaintiff to the loss caused to the cargo and that liability would subsist for a period of 3 years. It also held that the rights and liabilities of the plaintiff and defendants were governed by the terms contained in Ext. A30 as regards stevedoring operation agreed to be carried on by the defendant and the provisions of the Carriage of Goods by Sea Act had no application and that the suit filed within 3 years was well within the period of limitation. Accordingly, the lower Court passed a decree in favour of the plaintiff for recovery of a sum of Rs. 24,000/- by way of damages and an amount of Rs. 209.67 towards the amount