1964 Supreme(Mad) 450

Madras High Court
RAMAMURTI
Swastik Agency, Madras - Appellant
Versus
Madras Port Trust - Respondent
Decided On : 11/13/1964

The period of limitation for giving notice of loss or damage under S. 40(2) of the Madras Port Trusts Act commences from the date when the owner of the goods becomes aware of the loss or damage, and not from the date of the receipt given by the Port Trust under S. 39(3).

Headnote:

PORT TRUST ACT - S. 40(2) - NOTICE OF LOSS OR DAMAGE - LIMITATION - INTERPRETATION - CONSTRUCTION OF STATUTES - BAILMENT - LIABILITY OF PORT TRUST - BYE-LAW 31 - COMPLIANCE - SURVEY OF GOODS - DAMAGES - LIABILITY OF CLEARING AGENT - MAINTAINABILITY OF SUIT.

Fact of the Case:

Plaintiff imported 80 drums of coconut oil from Singapore. The consignment was detained by customs authorities for test purposes. On clearance, 7 drums were found tampered with and oil stolen. Plaintiff claimed damages from the Port Trust and issued a notice on 24-8-1957. The Port Trust denied liability, and the plaintiff filed a suit against the Port Trust and the clearing agent. The trial court found the Port Trust negligent and liable for damages but dismissed the suit against the clearing agent. The appellate court reversed the decision, holding that the notice of loss was not given within one month as required by S. 40(2) of the Madras Port Trusts Act, and that bye-law 31, which required the loss to be pointed out to the Traffic Manager before removal of goods, had not been complied with. The plaintiff appealed to the High Court.

Finding of the Court:

The High Court held that S. 40(2) should be interpreted to mean that the period of one month for giving notice of loss or damage would commence from the date when the owner of the goods becomes aware of the loss or damage, and not from the date of the receipt given by the Port Trust under S. 39(3). The court found that the plaintiff had no knowledge of the loss until after the goods were cleared from the Port Trust premises, and therefore the notice given on 24-8-1957 was within the prescribed period. The court also held that there had been substantial compliance with bye-law 31, as the loss had been brought to the notice of the Port Trust authorities immediately before the removal of the goods. The court restored the trial court's decree against the Port Trust and dismissed the suit against the clearing agent.

Issues: 1. Whether the plaintiff's suit was barred under S. 40(2) of the Madras Port Trusts Act on the ground that the notice of loss or damage had not been given to the Port Trust within one month of the date of the receipt of the goods under S. 39(3). 2. Whether bye-law No. 31 which provides that the Port Trust will not be answerable for any loss or deficiency unless ascertained, pointed out to and acknowledged by the Traffic Manager before the goods are removed from the Port Trust premises has been complied with in this case. 2(b) Whether failure to comply with the requirement of bye-law No. 31 would operate as a bar to the maintainability of the suit. 2(c) Whether the bye-law is ultra vires and in excess of the power conferred under S. 95(4) of the Port Trusts Act. 3. Whether a decree can be passed against the second defendant inasmuch as the plaintiff allowed the decision of the trial Court dismissing the suit as against the second defendant to become final and did not prefer any appeal therefrom.

Ratio Decidendi: 1. The court held that S. 40(2) of the Madras Port Trusts Act should be interpreted to mean that the period of one month for giving notice of loss or damage would commence from the date when the owner of the goods becomes aware of the loss or damage, and not from the date of the receipt given by the Port Trust under S. 39(3). The court reasoned that the purpose of the statute was to protect the Port Trust from belated claims, but that this purpose would be defeated if the time limit were to commence before the owner of the goods had any knowledge of the loss or damage. 2. The court held that there had been substantial compliance with bye-law 31, as the loss had been brought to the notice of the Port Trust authorities immediately before the removal of the goods. The court found that the survey of the goods had been conducted by an impartial and respectable surveyor, and that there was no evidence of any mala fides in the survey.

Final Decision: The High Court set aside the judgment of the lower appellate court and restored that of the trial court. The plaintiff's suit was decreed for Rs. 1198-64 against the first defendant with costs in the High Court and the court below and subsequent interest from the date of the decree. The suit was dismissed as against the second defendant but without costs.