GENERAL TRADERS LTD Vs. PIERCE LESLIE INDIA LTD

JUDGEMENT

(1.) Will the liability of a carrier of goods by sea cease on discharge of the cargo from the tackles of the vessel ? Can the owner of a ship escape liability, if the ship is chartered by another under a Charter Party ? Whether the defendants are entitled to the defence of "act of God" in this particular case ? These are the broad questions to be answered in these two connected appeals, though of course, some other ancillary questions also call for determination. A Division Bench of this Court, which heard these appeals, referred them to a Full Bench as the questions involved are "generally important enough to be considered by a Full Bench."

(2.) Briefly stated, the facts are as follows : "S. S. Lucky Three of Panama Flag" is a vessel owned by the first defendant, Wing on Steamship Company, which carries on business at Hongkong among other places. The said vessel was chartered by M/s. General Traders Limited (2nd defendant), a West Indies based concern, under Charter Party dated 8-1-1972. M/s. Cashew Corporation of India Ltd., a Government of India undertaking, (CCI, for short), engaged defendant 2 to tranship 15,000 bags of raw cashew nuts of Kanyan origin from Mombasa to Calicut. The goods were shipped at Mombasa in S. S. Lucky Three during early February, 1972. On receiving the consign-ment, the Master of the ship drew three bills of lading, Exts. B2, B3 and B4. The vessel arrived at the port of Calicut at 9.40 a.m. on 23-2-1972. Calicut is not a roadstead port, and there is some distance between the piers and the place nearest therefrom where the ship can reach. Hence, barges were used to transport goods from the ship to the piers. M/s. Malabar Steamship Company, Bombay, (the 3rd defendant), having branch office at Calicut, carried out lightering work as local agents of defendant 2 Company. But in the course of the lightering process, a number of bags of cashew nuts were jettisoned from the barges and a few other bags fell into the sea during unloading of the goods on the piers. Thus there was short delivery of 1350 bags of cashew nuts, besides the shortage of 4369 Kgs. of raw cashewnuts since 284 bags were delivered in torn and slack condition. The total loss was estimated at Rs. 1,99,537.90. The suit is for recovery of the said amount with interest.

(3.) The first plaintiff is M/s. Pierce Leslie India Limited and plaintiff 2 is New India Assurance Company Limited. Their case as revealed in the plaint, in short, shows that the CCI had allotted the said consignment to the first plaintiff even while the goods were on board the ship, that the bills of lading were entrusted to plaintiff 1 who became the holders thereof for value, that the consignments belonged to plaintiff 1 ever since the assignment in favour of plaintiff 1, and that the CCI was thereafter acting only as agents of plaintiff 1. The loss and/or damage caused to the consignment, according to the plaintiff, was entirely due to the negligence on the part of defendant 2 as well as their agent, defendant 3, in discharging the cargo from the steamer to the lighters when the weather was not conducive enough to transhipment, and that the lighters or barges used by defendant 3 were unfit and unseaworthy, or at any rate, unsuitable to protect the cargo in rough weather. According to the plaintiffs, the haste in discharging the cargo into the lighters despite the bad weather was only on account of the imprudent anxiety of defendant 2 to somehow empty the steamer of its cargo and leave the port at the earliest. By reason of the said act or omission, misfeasance, malfeasance and non-feasance, the defendants are jointly and severally liable to make good the loss, contended the plaintiffs. The further contention is that plaintiff 2 were the insurers of the said consignment and they paid the amount of loss to plaintiff 1 and thereby were subrogated to the rights and remedies of the insurer, and hence, plaintiff 1 has no objection in granting a decree in favour of plaintiff 2.