National Insurance Company Ltd. v. Navrom Constantza And Others

1. This is an application of defendants Nos. 1 and 2 for rejection of the plaint in the suit against the said defendants and for dismissal of the suit against the said defendants.

2. The plaintiff is National Insurance Company. On or about 9th June, 1983 the plaintiff has filed the suitagainst the defendants for a decree of Rs. 2,69,567.75 P. The defendant No. 1 is a ship owner incorporated under the appropriate laws of Rumania. The defendant No. 2 carries on business as agent of the Shipping Companies. The defendant No. 3 is Steel Authority of India which purchased 648 pieces of mild steel plates weighing 1459.57 Kgs. from a Rumania Company. It has been alleged that on or about 17th Sept. 1981, the defendant No. 2 acting as agent of the defendant No. 1 agreed with the defendant No. 3 that the defendant No. 1 would carry the said goods from the Port of Galatz to Calcutta. It is also alleged that on or about 30th Sept. 1981 the said goods were shipped on Board the vessel M.V Cugir (hereinafter referred to as the said vessel) owned by the defendant No. 1 for carriage from Galatz to Calcutta and in respect whereof a bill of lading dated 30th September, 1981 was issued by the defendant No. 1. It is also the allegation of the plaintiff that by a policy of insurance dated 22nd October, 1981 the said goods were insured with the plaintiff against divers risks including the shortage and rust damage. It is alleged that on or about 28th Nov. 1981 the said vessel arrived at the Port of Calcutta and on the same day the consignment was unloaded and discharged at the Port of Calcutta when it was found that 37 pieces of mild steel plates weighing 87 Metric tons had been short landed. When the defendant No. 3 came to know about the short landing, a short landing certificate was issued by the Calcutta Port Trust on 6th Feb. 1983. According to the plaintiff, on 23rd Feb. 1982 the clearing agent lodged and/or preferred a claim with the defendant No. 2 for a sum of Rs. 2,39,598/- on account of the said short landing as the value of the said goods. It is also the allegation of the plaintiff that the plaintiff duly paid the said sum under the policy of insurance and the defendant No. 3 issued a deed of subrogation in favour of the plaintiff.

3. The petitioner's case is that as it would appear from the writ of Summons, the plaint was presented and filed on 9th June, 1983 and the writ was issued on 4th March, 1985. The claims were made on the defendant No. 2 on account of the said alleged short landing by a letter dated 17th Feb. 1982. According to the petitioner, the said vessel left the Port of Calcutta on 7th Dec. 1981 which would be evident from a certificate of the Calcutta Port Trust, a copy whereof is annexed to the petition being Annexure ‘F’, and it would also be e vide not from the outturn report of the Calcutta Port Trust being Annexure ‘G’ to the petition.

4. It is the case of the petitioner that the said bill, of lading dated 30th Sept. 1981 constitutes a contract of carriage incorporating the Hague Rules 1924. It is further alleged by the petitioner that in the alternative the carriage of goods by Sea Act 1925 incorporating the said Hague Rules 1924 is applicable to the transaction between the parties. According to the petitioner under Art. III of R. 6 of the said Rules the carrier stands discharged from all liability one year after the discharge of the goods or when the goods ought to have been delivered.

5. According to the petitioner, the last possible date of filing of the suit should be 7th Dec. 1982 after which the carrier stood discharged from all liability. It is the further case of the petitioner that it would be evident from the facts stated in the petition that the alleged cause of action of the defendant No. 3 arose more than one year before 9th June, 1983 when the suit was filed. Therefore, according to the petitioner, on the date of filing of the suit, the petitioners were discharged from all liability and all liabilities of the petitioners in respect of the said carriage stood extinguished on the date of the filing of the suit. It is, therefore, the contention of the petitioner that the plaint does not disclose any cause of action against the petitioner nor does the plaint disclose any cause of action. In view of the above, it is the submission of the petitioner that the plaint be rejected and taken off the file as the entire alleged cause of action of the defendant No. 3 enforced by the plaintiff in the suit stood extinguished. On the date of the filing of the suit petitioners were discharged from all liability. The petitioners liability, if any, stood discharged after the expiry of the period of one year after the discharge of the goods or when the goods ought to have been delivered. In any event, the liabilities of the petitioners were discharged on 7th Dec. 1981 when the said vessel left the Port of Calcutta as the goods ought to have been delivered on or before 7th Dec. 1981 when the said vessel admittedly left the Port of Calcutta.

6. It is the submission of the plaintiff respondent that to decide whether on not a plaint discloses the cause of action, the court has to look at such statements as are contained in the plaint and to nothing else. It is also the contention of the plaintiff respondent that for the purpose of dismissal of this application at an interlocutory stage the petitioners, the defendants Nos. 1 and 2 must be taken to have admitted the statements contained in the plaint and it is the further contention of the plaintiff respondent that the power to reject the plaint for not disclosing the cause of action can only be exercised if the Court comes to the conclusion that even though all such statements are proved the plaintiff would not be entitled to any relief whatsoever. It is also the averment of the plaintiff respondent in the plaint that the quantity of mild steel plates was consigned for carriage by Sea on board the vessel “Cugir” from “Galatzi” a Port in the Socialist Republic of Romania to the Port of Calcutta in India. It is contended by the plaintiff respondent that it is nowhere pleaded in the plaint that the vessel left the Port of Calcutta on 7th Dec. 1981. It is also the case of the Plaintiff respondent that the bill of lading whether or not it incorporated the Hague Rules 1924 does not form any part of the cause of action as disclosed in the plaint but constitute the documentary evidence of contract of carriage which however, no doubt has been pleaded as a part of the cause of action in the plaint. It is also the case of the plaintiff respondent that the Carriage of Goods by Sea Act, 1925 incorporating the said Hague Rules, 1924 are not applicable to the transaction_between the parties. It is also the contention of the plaintiff respondent that in any event, Article III Rule 6 of the said rules or the said Carriage of Goods by Sea Act, 1925 has no application to the liability of the defendant carriera salleged in the plaint. It is being pleaded that the goods were consigned for carriage on the said vessel for reward from the Port of “Galatz” in Romania to the Port of Calcutta in India.

7. Mr. S.K Roy Chowdhury, learned Counsel for the petitioner, has submitted that it is true that this application of the petitioner should be considered in the context of averment contained in the plaint and if on the scrutiny of the plaint it is found by the Court that the plaint does not disclose any cause of action or where the suit appeared from the statement of the plaint to be barred by any law then the Court should direct the plaint to be taken off the file at the interlocutory stage under O. 7 R. 11(a) and (d) of the Civil P.C Mr. Roy Chowdhury submits that it is not in dispute that the instant suit is governed by the Carriage of Goods by Sea Act, 1925 (hereinafter referred to as the said Act). He submits that in terms of Article III Rule 6 in the Schedule to the said Act the carrier and the ship shall be discharged from all liability in respect of loss or damage unless the suit is brought within one year after delivery of the goods or the date when the goods should have been delivered. Mr. Roy Chowdhury contends that the vessel “Cugir” carrying a consignment of mild steel plates of defendant No. 3 arrived at the Port of Calcutta on 27th Nov. 1981 and on the same date the said consignment upon being unloaded and/or discharged at the Port of Calcutta was found to have been short landed by 37 several pieces of mild steel plates. It is averred in paragraph 11 of the plaint that the defendant No. 3 came to know about the short landing of such 37 pieces of mild steel plates on the same day that is on 27th Nov. 1981. It is also pleaded in the plaint in the same paragraph that the short landing certificate bearing No. 2/5.SD dated 6th Feb. 1983 (1982?) was duly issued by the Calcutta Port Trust confirming the short landing as aforesaid of the said 37 pieces of mild steel plates from board the said vessel “Cugir”. A copy of the short landing certificate is annexed to the plaint. It will appear from paragraph 12 of the plaint that the allegation of the plaintiff is that the defendant No. 1 and the defendant No. 2 in breach of their contract and of their duty as common carrier failed and neglected to deliver the said quantity of 37 pieces of mild steel plates. Accordingly to Mr. Roy Chowdhury, the said short landing certificate dated 6th Feb. 1982 issued by the Calcutta Port Trust confirmed the short landing of said 37 pieces of mild steel plates. Mr. Roy Chowdhury, therefore, contends that the alleged liability of the defendants Nos. 1 and 2, the petitioners herein arose on 27th Nov. 1981 at the time of unloading when goods were found to the short landed and necessary certificate was issued confirming the said short landing. It is not in dispute that the suit was filed on 9th June, 1983 in this Court. Mr. Roy Chowdhury submits that in terms of Article III Rule 6 in the Schedule to the said Act, the liability, if any, of the carrier, namely, defendants Nos. 2 and 3 in respect of alleged loss or damage would stand discharged if the suit is not brought within the one year after the delivery of the goods or the date when the goods should have been delivered. He contends that it is clear from the plaint that the goods were delivered on 27th Nov. 1981 and on the said date the said consignment upon being unloaded or discharged was found to have been short landed by 37 pieces of mild steel plates weighing 87 metric tons out of the total quantity of 648 pieces shipped on board on the said vessel. Therefore, according to Mr. Roy Chowdhury this suit should have been brought within a period of one year from the date of delivery of the goods that is, on 27th Nov. 1981. According to Mr. Roy Chowdhury admittedly the present suit has been instituted beyond that period. In the present case the suit has been instituted on 9th June, 1983.

8. Mr. Roy Chowdhury contends that whatever liability the defendants Nos. 2 and 3 had in respect of the said alleged loss or damage stood completely discharged or extinguished after the expiry of one year from the date of delivery of the goods. It is therefore, the submission of Mr. Roy Chowdhury that the plaintiff has no cause of action against the defendants Nos. 2 and 3 nor does the plaint disclose any cause of action. Further, according to Mr. Roy Chowdhury the suit appeared to be barred by the laws contained in the said Act. Mr. Roy Chowdhury alternatively, submits that one year period should be computed when the goods should have been delivered. If the delivery was not certain, then it appears from the out-turn report of the petition that the vessel left the Port of Calcutta on 7th Dec. 1981 and the goods ought to have been delivered before the vessel had left the Port of Calcutta. Therefore, one year period should be computed either from the date of delivery that is, 27th Nov. 1981 or the date of departure of the vessel from the Port of Calcutta on 7th Dec. 1981. Mr. Roy Chowdhury therefore, contends that taking any date for the purpose of computation, admittedly the suit is barred and thereafter liability of the defendants Nos. 2 and 3 stood entirely extinguished or discharged by the operation of law.

9. Mr. Roy Chowdhury in this connection has referred to a decision of Supreme Court in the case of East and West Steamship Co. v. S.K Ramalingam reported in AIR 1960 SC 1058 and a Bench decision of this Court in the case of J.R Jugoslavia v. Feb Leathers Limited reported in AIR 1985 Cal 193.

10. Mr. Deb, learned counsel appearing for the plaintiff respondent has submitted that the plaintiff National Insurance Company has instituted the suit by virtue of subrogation. Mr. Deb submits that it has been pleaded in paragraphs 15 and 16 of the plaint that the defendant No. 3 duly caused its subsidiary Braithvaitt Purn & Jessop Constructions Company Ltd. to prefer or make its claim under the policy made by the defendant No. 3 with the plaintiff and upon payment of the amount claimed, namely, Rs. 2,39,598/- by the plaintiff to the defendant No. 3, deed of subrogation was executed by the defendant No. 3 in favour of the plaintiff and thereby the plaintiff was subrogated to the rights, title and interest in respect of the goods in question. Mr. Deb has submitted that whether the Hague Rules would be applicable or not or that bill of lading whether or not incorporated Hague Rules of 1924 does not form part of the cause of act on but is a mere documentary evidence of the contract of carriage. Therefore, whether the suit is barred in terms of the said Hague Rules or the bill of lading is a matter of defence and not a part of the cause of action alleged in the plaint. It is more or less settled that the application of this nature at this interlocutory stage would have to be considered on the basis of the averment contained in the plaint and the same being taken as true for the purpose of this application. Therefore, according to Mr. Deb, whether the liability of the defendants Nos. 2 and 3 ought to be discharged in terms of the Hague Rules as applicable to the bill of lading in question or not, that question cannot be decided at this stage and should be left to be decided at the trial of the suit. Alternatively, Mr. Deb submits that Article III Rule 6 in the Schedule to the said Act has no application to the liability of the defendant carrier as pleaded in the plaint because it is stated in particular in the plaint that the goods were consigned for carriage on the said vessel for reward for (from) the Port of “Galatz” in Romania to the port of Calcutta in India. Mr. Deb has referred to S. 2 of the said Act which, inter alia, provides that subject to the provisions of this Act the Rule set out in the schedule shall have effect in relation to and in connection with the carriage of goods by Sea in Ships carrying goods from any Port in India to any other Port within or outside India. According to Mr. Deb, the said Act applies only to the carriage of goods by Sea in ship carrying goods from any Port in India to any other Port within or outside India. As it is pleaded in the plaint and admittedly the case is that the goods were consigned from the Port of Romania to be delivered to the Port of Calcutta within India. Since the Port of loading was outside India then this Act has no application to the present case, and therefore, the provisions contained in Article III Rule 6 in the schedule to the Act have no application to the present case. Mr. Deb has cited in support of his contention a decision of this Court, reported in (1969) 73 Cal WN 279 at page 287.

11. I have considered the respective submissions of the learned Counsel appearing for the parties. It is no doubt true that for the purpose of this application the averments contained in the plaint should be taken as correct and the Court will have to consider whether taking statements in plaint as true, the plaintiff would be entitled to any relief claimed in the plaint.

12. It is specifically pleaded in paragraph 11 of the plaint that on 27th Nov. 1981 the said Motor Vessel, “Cugir” carrying on board the consignment of mild steel plates arrived at the Port of Calcutta. On the same day the said consignment upon being unloaded and/or discharged at the said Port of Calcutta was found to have been short landed of 37 several pieces of mild steel plates weighing 87 matrictons out of the aforesaid quantity of 648 pieces shipped on board the said vessel. It is further pleaded in paragraph 11 of the plaint that the short landing certificate bearing No. 2/5.RSD dated 6th Feb. 1983 was issued by the Calcutta Port Trust confirming the short landing of the said 37 pieces of mild steel plates on the board from the said vessel “Cugir” and a copy of the short landing certificate is annexed to the plaint. Therefore, it appears on the basis of the averment contained in the plaint the goods were delivered on 27th Nov. 1981 when the said vessel arrived at the Port of Calcutta. It is not in dispute that the suit was instituted on 9th June, 1983.

13. The material portion of Article III Rule 6 in the Schedule to the said Act is as follows:

“In any event, the carrier and the ship shall be discharged from all liability in respect of loss or damage unless the suit is brought within one year after delivery of the goods or the date when the goods should have been delivered”.

14. The Supreme Court considered the effect of the said Rule 6 of Article III in the case of East and West Steamship Co. v. S.K Ramalingam reported in AIR 1960 SC 1058. It is observed therein that the ordinary grammatical sense of discharge from liability does not connote free from remedy as regards liability but are more apt to mean a total extinction of the liability following upon an extinction of the right. It is further observed that once the liability is extinguished under this clause there is no scope of any as knowledgement of liability thereafter. It is provided clearly in the said Rule 6 of Article III that the carrier of the ship shall be discharged from all liability in respect of loss or damage unless the suit is brought within one year after delivery of the goods or the date when the goods should have been delivered. Therefore, in my view, the effect of this Rule is not that the remediesa re barred but the effect of it is the total extinction of the right. In my view, if the right is extinguished then there is no cause of action of the plaintiff against the defendants Nos. 2 and 3. Since the right has been extinguished there is nothing to enforce in the suit. Therefore, in my view, the plaint does not disclose any cause of action. I am, further, of the view, that the suit as it appears from the statement contained in the plaint is barred by law within the meaning of R. 11(d) of O. 7 of the Civil P.C

15. The said Act has adopted the provisions of the Rules of 1924 and the said Rules have been given a statutory recognition by the said Act. In a Bench decision of this Court in the case of J.R Jugoslavia v. Fab Leathers Limited (AIR 1985 Cal 193) (supra), it has been observed by this Court that the goods once having been delivered with a short delivery certificate the period of limitation prescribed by clause (vi) must run from that date. The said Bench decision is binding on me and also I find myself in entire agreement with the observation made by this Court in the said decision reported in AIR 1985 Cal 193 (supra).

16. It has been submitted by Mr. Deb, learned counsel appearing for the plaintiff respondent that in terms of S. 2 of the said Act, the said Act has no application to the present case inasmuch as the consignment was made from the Port outside. India for delivery to a Port within India and he has cited in support of his contention a decision of this Court reported in (1969) 73 Cal WN 279 (supra). Mr. Roy Chowdhury, learned Counsel appearing for the petitioner in answer to the said contention has submitted that the Hague Rules 1924 have been given a statutory recognition and codified in the said Act and this Act applies and the effect of S. 2 of the said Act is that the said Hague Rules as adopted and codified by this Act are applicable also to the carriage of goods by Sea carrying goods fromany other Port outside India to the Port within India. It would be clear because it is also provided in S. 4 of the Act that every bill of lading or similar document of title issued in India should contain an express statement that it is to have effect subject to the provisions of the said Rules as applied by the said Act. Therefore, according to Mr. Roy Chowdhury it is merely an extension of the Hague Rules to carriage of goods from one Port of India to other Port within or outside India. It is his submission that S. 2 of the said Act is no bar to the application of this Act to the carriage of goods by Sea carrying goods from any other port outside India to the Port within India. Mr. Roy Chowdhury, in any event, suggests that it would appear from another case deciding the scope of the said Article III of Rule 6 in a case reported in AIR 1972 SC 1405 that the said Act has been applied to case of carriage of goods by sea from a port outside India to a port within. It is also in relation to carrying of goods by Sea from a port outside India to a Port within India. In the said Bench decision reported in AIR 1985 Cal 193 the Port of loading was outside India and Port of discharge was within India. The said Act was made applicable to the case as well. I agree with the submission made by Mr. Roy Chowdhury. In my view, S. 2 of the said Act is merely an extension of the application of the Hague Rules to a case of a carriage of goods in ship carrying goods from any Port of India to any other port in India or outside. I am, therefore, of the view that this Act is equally applicable to the present case.

17. I am of the view that this plaint does not disclose any cause of action and also from the statement of the plaint it appears that the suit is barred by law provided in the said Act. Therefore, in my view, the plaint in the suit should be rejected under O. 7 R. 11(a) & (d) of the Civil P.C.I hold that the suit being clearly barred against the defendant Nos. 1 and 2, the Court cannot but reject the plaint under O. 7 R. 11 of the Code. There will be an order in terms of prayers (a) and (b) of the Notice of Motion.

18. There will be no order as to costs.

Order accordingly.