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1983 Supreme(Mad) 204
2 1988 ACC 90
S Kader
E.I.D. Parry (India) Ltd.
Versus
Far Eastern Marine Transport Co. Ltd. And Anr.
Decided On : 2/4/1983
.
The failure of the assured to file a suit against the carrier within the limitation period extinguishes the carrier's liability and deprives the insurer of its right of indemnity, leading to the dismissal of the suit against the insurer.
Headnote:
CARRIAGE OF GOODS BY SEA ACT - SHORT LANDING OF GOODS - LIMITATION - LIABILITY OF CARRIER AND INSURER - SUBROGATION RIGHTS OF INSURER - EFFECT OF FAILURE TO FILE SUIT WITHIN ONE YEAR - EXTINGUISHMENT OF LIABILITY - DISMISSAL OF SUIT.
Fact of the Case:
Plaintiff, a body corporate, entered into a contract with M/s. Patel Holdings Limited SDN/ BHD Malaysia for the import of Palm Olien Oil. The goods were shipped to Madras by the vessel S.S.'SUN DUEX' belonging to the first defendant, whose local agent at Madras is the second defendant firm. Upon discharge of the cargo, it was found that there was short-landing of goods. The plaintiff filed a suit for damages against the carrier, agent, and insurer.
Finding of the Court:
1. The plaintiff failed to prove the alleged short-landing of goods and the value of the goods alleged to have been short-landed. 2. The B Certificates issued by the Port Trust of Madras were not sufficient to prove the short-landing of the cargo. 3. The plaintiff was entitled to maintain the suit as the consignee and owner of the goods. 4. The second defendant, as the local agent of the carrier, was not liable for the suit claim. 5. The defendants were not liable to compensate the plaintiffs for the alleged short-landing of goods. 6. The suit against the first defendant was barred by limitation under Clause (3) of paragraph 6 of Article III of the Schedule to the Carriage of Goods by Sea Act, 1925. 7. The suit against the third defendant insurer failed as the plaintiff's failure to file the suit against the carrier within one year extinguished the carrier's liability and deprived the insurer of its right of indemnity.
Issues: 1. Whether the short landing of the Cargo is true? 2. Whether the B Certificate issued by the Port Trust authorities is sufficient to prove the short landing of the cargo? 3. Are the plaintiffs not entitled to maintain the suit for the reasons set out in the written statement? 4. Is the second defendant liable for the suit claim? 5. Are the defendants not liable to compensate the plaintiffs in the sum of Rs. 1,98,369? 6. Is the suit barred by limitation? 7. To what relief are the Plaintiffs entitled?
Ratio Decidendi: 1. The Carriage of Goods by Sea Act, 1925 provides a one-year limitation period for suits against carriers for loss or damage to goods. 2. The liability of the carrier under the Act is extinguished after one year from the date on which the goods should have been delivered. 3. The insurer's right of subrogation is dependent on the assured's rights against the carrier. 4. If the assured fails to file a suit against the carrier within the limitation period, the insurer's right of indemnity is extinguished. 5. The plaintiff's failure to file the suit against the carrier within one year extinguished the carrier's liability and deprived the insurer of its right of indemnity, leading to the dismissal of the suit against the insurer.
Final Decision: The suit against the first defendant carrier and the second defendant agent was dismissed as the plaintiff failed to prove the short-landing of goods and the suit was barred by limitation. The suit against the third defendant insurer was also dismissed as the plaintiff's failure to file the suit against the carrier within one year extinguished the carrier's liability and deprived the insurer of its right of indemnity.
S.A. Kader, J.
1. This is a suit for damages of Rs. 1,98,369 with subsequent interest and costs for short-landing of goods. The Plaintiff is a body-corporate incorporated under the Indian Companies Act. The Plaintiff-Company entered into a contract with M/s. Patel Holdings Limited SDN/ BHD Malaysia for the import of Palm Olien Oil. In pursuance of the aforesaid agreement the Foreign Supplier shipped 1574 drums of the said Oil to Madras by the Vessel S.S.'SUN DUEX' belonging to the first defendant, whose local agent at Madras is the second defendant firm. The shipment of the goods was covered by the bills of Lading bearing Nos. PK/M 20 dated 30-8-1977 covering 259 drums and PK./M21 dated 30-8-1977 covering 1315 drums. The goods were insured against all risks including shortage with the third defendant-Insurance Company. The vessel arrived at Madras Harbour on 18-91977 and upon discharge of the cargo, it was found that in respect of the first consignment covered by Bill of Lading No. PK/M20, 45 out of 259 drums were short-landed and in respect of the second consignment covered by Bill of Lading No. PD/M 21, 80 out of 1315 drums short landed. The plaintiff was given by the Port Trust of Madras the requisite short-landing certificates. The value of the goods short landed is calculated by the plaintiff at Rs. 70,389 in respect of the first consignment and Rs 1,27,980 in respect of the second consignment aggregating to Rs. 1,98,369/- being the proportionate C.I.P. value. The plaintiff company lodged a claim with the, first defendant on 2811-1977 for the value of the shortages but in vain. Hence the said sum of Rs 1.98,369/- is due and payable by the first defendant. The third defendant insurer is equally liable for the loss sustained by the plaintiff on account of short-landing. The defendants are jointly and severally liable to the plaintiff to the sum of Rs. 1,98,369/- and hence this action.
2. The first defendant-Far Eastern Marine Transport Company has raised the following contentions:-The plaint does not disclose how the Plaintiff-company is entitled to the goods covered by the suit consignment and how the suit is maintainable. This defendant is not aware of the con tents of the drums or their value. It is denied by this defendant that there was any short-landing of goods and it is asserted that all the drums covered by the two bills of lading were fully discharged at the Port at Madras. Denying any knowledge of this short-landing certificates issued by the Port Trust of Madras, this defendant has averred that the loss if any must have occurred while the goods were in the custody of the Port Trust of Madras. The plaintiff was put to strict proof of the alleged short-landing and the value of the goods alleged to have been short-landed. This defendant's name has been subsequently added in the Plaint and the suit against this defendant is hopelessly barred by time. This defendant has therefore prayed for a dismissal with costs.
3. The second defendant contends that it is only an agent of the first defendant-company and is not at all liable for the suit claim. In other respects, it has adopted the written statement of the first defendant.
4. The third defendant-Insurance Company has claimed that the primary liability is on the first defendant-carrier and only after exhausting the remedy against the carrier any proceeding can be taken against the third defendant. The plaintiff is also put to strict proof of the loss having occurred due to the risk covered by the policy of insurance that the said risk occurred during the continuance of the policy, the factum of short landing and the value of the goods that were short-landed.
5. In their additional written statement the third defendant-Insurance Company contends that if the first defendant-Carrier escapes liability on the ground that the liability of the Carrier became extinguished, the suit having been filed after one year from the date on which the goods ought to have been discha
