Far Eastern Steamshi... v. Koika Trading Co., L...

(1) The far eastern steamship company, also known as fesco lines, vladivostok, carrying on business at kakinada, through their agents m/s. D. S. Narayana and company, kakinada, the defendants in the suit o. S. No. 267 of 1972 on the file of the court of the subordinate judge, kakinada, are the petitioners. The first plaintiff in the suit are koika trading company ltd. , osaka japan and second and third plaintiffs are new india assurance company limited, bombay and aspinwall and company limited, cochin and kakinada. The defendants area steamship company incorporated in u. S. S. R and carry on business as common carriers by sea and carry for reward goods inter alia from ports of india to japan. The defendants are the owners and/or charterers of the ship. "m. V. Kolya mygotin", hereinafter referred to as the ship at all material times. The first plaintiffs are a limited company incorporated in japan and carry on business as importers and exporters having their head office at osaka, japan. The plaintiffs filed the suit against the defendants for recovery of rs. 58,866. 33 ps. Being the value of 329 bales of palmyrah fibre delivered by the defendants in a rotten condition.

(2) The case of the plaintiffs briefly stated is :that in feb. , 1971 the third plaintiff booked 370 bales of palmyrah livered the consignments in a securely and properly packed condition to m/s. D. S. Naryan and company for carriage from kakinada to kobe by the ship, that the defendants - agents issued receipts in the form of bills of lading for and on behalf of the defendants nos. Kk - 14, kk - 15 and kk - 16 dated 27 - 2 - 1971 marked as exts. A - 1 to a - 3 for the said consignments acknowledging that the said consignments were received on board the ship in good order and condition, that the ship arrived with the goods at kobe on or about 9 - 4 - 1971 and delivered the consignments to the first plaintiffs and that that after survey it was found that the three consignments consisting of 359 bales of palmyrah fibre were in a damaged and rotten condition due to the negligence of the defendants, for which the defendants were liable to make good the loss.

(3) The first plaintiffs briefly sent a preliminary notice of claim to m/s. Kumagai kaiun kaisha limited, kobe on 7 - 5 - 1971. But the claim was repudiated by the agents of the defendants by their reply dated 9 - 7 - 1971 stating their inter alia that the damages were probably caused by the stress of bad weather the ship encountered in the voyage. A copy of the marina protest filed at tokyo, japan by the master of the ship was also sent. Thereafter the plaintiffs submitted their claim through their agents m/s. V. L. N. C. Narichauia (p) ltd. , bombay to the defendants on 2 - 2 - 1972 and suggested amicable settlement of the claim and further stated that since the claim would attract limitation the claim may be settled immediately. By their cable dated 28 - 2 - 1972, the claims agents of the plaintiffs suggested expeditious settlement and extension of time for six months with effect from 1 - 4 - 1972. As no cable was received form the defendants, they sent another cable on 14 - 3 - 1972 and later on 16 - 3 - 1972 to expedite the reply failing which the plaintiffs would file a suit. The defendants then replied by their cable dated 16 - 3 - 1972 extending time by six months. Later the defendants, referred the claim to their agents m/s. D. B. Madan and co. Madras, who by their letter dated 27 - 5 - 1972 repudiated the claim. The plaintiffs thereafter filed the suit.

(4) The main defence of the defendants in the suit was that the court at kakinada had no jurisdiction to entertain the suits in view of cls. 26 and 27 of the conditions of bills of lading. According to the defendants, as per the said clauses, all claims and disputes arising under and in connection with the bill of lading shall be judged in the ussr and shall be determined according to the merchant shipping code of the ussr and the above said clauses in the bill of lading were perfectly valid and binding on the parties. The defendants further pleaded that expediency, balance of convenience and ends of justice also require that the said conditions of the contract which were valid and binding on the parties shall be fully given effect to having regard to the following circumstances: (a) all the witnesses such as the port authorities in kobe and all port documents are available in kobe, japan. (b) the surveyors who surveyed the cargo have to be examined and they are also in kobe. (c) the ships agent who rejected the claim have to be examined and they are also in kobe. (d) the master and officers of the vessel are to be examined and it would not be possible to examine them in india. (e) the master of the vessel lodged a protest on 4 - 4 - 1971 with the notary public at kobe, japan. (f) the consignee himself who lodged his claim with the steamer agents in kobe is also in japan and he is also to be examined. It was also further pleaded that the entire cause of action for the suit had taken place outside the jurisdiction of the court of kakinada, that no damage to the goods took place in india, that the alleged damage to the goods was caused due to the boisterous weather encountered by the vessel and, therefore, for that reason also the court had no jurisdiction to maintain the suit. One other defence was that the defendants shall be deemed to have been discharged from all liability in respect of the damage if any under cl. 3 of para 6 of art. 3 in the schedule to the carriage of goods by sea act of 1925 inasmuch as the suit was not filed within one year of the date of delivery of goods, namely 15 - 4 - 1971. According to the defendants, there is no acknowledgement of liability in law inasmuch as the said period of one year is not a period of limitation capable being extended under the limitation act.

(5) On the pleadings of the parties, as many as 17 issues and one additional issue were framed as per the orders of the court, issues 1, 2 ,3 16 and additional issue were ordered to be tried as preliminary issues. They read as follows: issues 1 to 13 and 16.

"1. Whether this court has jurisdiction to entertain this suit in view of cls. 26 and 27 of the conditions of the bill of lading?1 2. Whether the said clauses in that bill of lading are illegal as contended by the plaintiff? 3. Whether this court has no jurisdiction to entertain this suit for the reasons urged in para. 4 of the written statement? 16. Whether the defendants are discharged from all liability in respect of damage to the suit consignment for the reasons urged in para, 19 of the written statement? additional issues: whether the defendant submitted to the jurisdiction of this court and therefore are precluded from questioning the jurisdiction."

(6) Neither side led in any oral evidence at the trial. On behalf of the plaintiffs exs. A - 1 to a - 16 were marked and the defendants did not file any documents on their side.

(7) The learned subordinate judge held on issues 1,3 and the additional issue that the defendant himself had submitted the jurisdiction of the court having pleaded the written statement on the merits in the case and having invited a decision of this court on the pint of limitation also and, therefore, it was not open to the defendant now to turn round and plead that the court had no jurisdiction to try the suit against him. On issue no. 16, the trail court held that the defendants were not entitled to the benefit of immunity contained in c. (3) of para. 6 of art. Iii in the carriage of goods by sea act of 1925 since in the bills of lading, exs. A - 1 to a - 3 there is no specific provisions as to the application of rules of the carriage of goods by sea act and that the suit was only governed by art. 10 of the limitation act of 1963. It was, therefore held that the suit was in time. On issue no. 2, the finding was that clauses 26 and 27 of the conditions of bills of lading were not illegal. Thus, issues 1, 3, 16 and the additional issue were decided in favour of the plaintiffs and against the defendants and issue no. 2 was held in favour of the defendants and against the plaintiffs. Aggrieved against the findings of the learned subordinate judge on issues 1, 3, 16 and the additional issues, the defendants have preferred this revision petition.

(8) Two questions were argued before me: 1. The claim of the plaintiffs got extinguished by the operation of the provisions of para 6 of cl. (3) of art. Iii in the sch. To the carriage of goods by sea act, 1925 is as much as the suit is not filed within one year from the date of delivery of the goods: 2. The court at kakinada has no jurisdiction to try the suit and in any case expediency and balance of convenience require that the suit should be tried at kobe, japan and not by the court at kakinada.

(9) Now, turning to the first question it is the contention of the learned counsel for the petitioner that the bills of lading exs. A - 1 to a - 3 which evidence the contract of carriage by sea, incorporate all the terms and provisions of the carriage of goods by sea act, act 26 of 1925 (hereinafter referred to as the act) and the schedule thereto and that the defendant in consequence was entitled to the benefit of immunity enacted in cl. 3 of para 6 of art. Iii of the act. The relevant portion in clause 3 of paragraph 6 of art. Iii reads as hereunder: "in any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered.

(10) At this stage, it would be relevant to read also ss. 2 and 4 of the act:

"2. Application of rules: subject top the provisions of this act, the rules set out in the schedule (hereinafter referred to as "the rules") 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 whether in or outside india. 3. X x x x x x x - 4. Statement as to application of rules to be included in bills of lading: - - - every bill of lading, or similar document of title, issued in india which contains or is evidence of any contract to which the rules apply, shall contain an express statement that it is to have effect subject to the provisions of the said rules as applied by this act. "

(11) Under s. 2, the rules set out in the schedule shall have effect subject to the provisions of the act. S. 4 enjoin that there shall be an express statement as to the application of rules in every bill of lading.

(12) Thus the immunity contained in c. 3 of para. 6 of article 3 of the sch. To the act could be claimed by the carrier if two conditions are fulfilled: 1. The bill of lading must have been issued; 2. The bill of lading should contain an express statement that it was subject to the provisions of the rules as applied by the act.

(13) In this case, it is not disputed that the bills of lading, exs. A - 1 to a - 3 do not contain any such express provisions. It is equally undisputed that the suit was brought beyond one year from the date of delivery of goods. But, however, it is contended by the defendants that the plaint itself proceeds on the basis that the provisions of the carriage of goods by sea act are applicable and therefore, the defendants are discharged from all liability in respect of the loss or damage under cl. Iii of para 6 of art. Iii. It is no doubt true that the averments in the plaint support to some extent the submission of the learned counsel. But the mere reference in the plaint to the provisions of the carriage of goods by sea act will not after the nature and terms of the contract as evidenced by the bills of lading, exs. A - 1 to a - 3. There grimly stands and stares the undisputed fact that the bills of lading, exs. A - 1 to a - 3 do not contain a specific statement as to the application of the rules in the schedule. In the absence of any such specific provisions of the act to the contract in question cannot be invoked by the defendants. The was the view taken by the madras high court in the province (state) of madras v. I. S. And c. Machado, (1955) 2 mad lj 240 : (air 1955 mad 519). There in, it was held (at p. 521 of air) :

"the provision of the rules embodied in the schedule to the act do not apply proprio vigore to all contracts of carriage by sea but only in cases where a bill of lading has been issued incorporating the provisions of the act."

(14) The learned judge placed reliance on a decision of the privy council in vita food products inc. V. Unus shipping company, 1939 ac 277 wherein lord wright, dealing with the similar provisions of the english act held that the provisions of the english act held that the provisions of the act were directory and not mandatory and that the failure to obey the directions do not render the contract illegal.

(15) A similar question arose before the travancore - cochin high court in muhammadui steamship co. V. Keserishik vallabdas, air 1957 trav co. 133. In that case, as in this case, the bill of lading did not contain a statement as required by s. 4 of the act. The learned judges, relying upon the decision of the madras high court in province of madras case (supra) held that the provisions of the rules embodied in the schedule to the act did not apply proprio vigore to all contracts of carriage by sea, but only in cases where a bill of lading has been issued incorporating the provisions of the governed by art. 10 of the limitation act for filing a suit for compensation of loss or injury occurs. If the limitation act of 1963 is applicable, then the suit is undisputedly in time.

(16) The learned counsel placing reliance on a decision of the supreme court in east and west steamship co. V. S. K. Ramalingam, air 1960 sc 1058 submits that cl. 3 of para 6 of art. Iii to the schedule of the act is not merely a rule of limitation but a rule that provides for the extinction of the right to compensation and, therefore, the suit was not maintainable beyond the period prescribed in the rule. The supreme court, in that case 4, observed (at p. 1065) : - - "the question we have to decide is whether in saying that the ship or the carrier will be "discharged from liability" only the remedy of the shipper or the consignee was also being terminated. It is useful to remember in this connection the international character of these rules, as has been already emphasised above, rules of limitation are likely to vary from country to country. Provisions for extension of periods prescribed for limitation would similarly vary. We should be slow therefore to put on the words "discharged from liability" an interpretation which would produce results varying in different countries and thus keeping the position uncertain for both the shipper and the ship owner. Quite apart from this consideration however, we think that the ordinary grammatical sense of discharged from liability does not connote "free the remedy as regard liability" but are more apt to mean a total extinction of the right. We find it difficult to draw any reasonable distinction between the words "absolved from liability " and "discharged from liability" and think that these words "discharged from liability" were intended to mean and do mean that the liability has totally disappeared and not only that the remedy as regards the liability has disappeared. " this decision was again referred to and applied in american export isbrandtsen lines inc. V. Joe lopez, air 1972 sc 1045. But i am unable to understand how these decisions are of any relevance to the facts of this case. As already noticed, the provisions of the act are not applicable tot he contract in this case.

(17) The second contention is that the court at kakinada has no jurisdiction to try the suit and that expediency and balance of convenience and ends of justice require that the shut should be tried by the court at kobe because all the material witnesses and the documents are at kobe, the surveyors who surveyed the cargo are at kobe and the ships agents who rejected the claim are at kobe, the masters and officers of the vessel are in u. S. S. R. And the consignee himself who has lodged his claim with the steamer agents is in kobe. But the written statement filed in the case clearly shows that the defendants pleaded on the merits and have voluntarily submitted to the jurisdiction of the court, and therefore, the defendants cannot be permitted to question the jurisdiction of the court. It is now well settled that to constitute submission is the international sense it would not be necessary that the defendant should actually participate in the trial, it would be enough if he has pleaded on the merits of the case, because thereby he has disclosed an intention to take the chance of a decision on the merits of the case. Vide: rama v. Krishna, ilr 39 mad 733 : air (1917 mad 780) (fb) and anantanarayan v. Massey ferguson ltd. (1965) 1 mad lj 550.

(18) The revision petition, therefore fails and it is accordingly dismissed with costs.

(19) Revision petition dismissed.