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M. Ex. Case No. 7 of 1955, decided on 13th July 1956.
S. 51‑Position of judgment‑creditor vis‑a‑vis 0jfcial Assignee‑Civil Procedure Code (V of 1908), S. 64‑Companies Act (VII of 1913), S. 229.
A secured creditor has not been defined in‑the Companies Act, 1913 but, by reason of the provisions of section 229 of the Act, a secured creditor under the Companies Act must mean the same thing as under the Provincial Insolvency Act, 1920. The position of an attaching creditor under the Companies Act 1913, is not that of a secured creditor although he may have certain rights by reason of attachment. The making of an order of attachment in favour of a judgment creditor obtained under the Civil Procedure Code only operates so as to give the judgment‑debtor certain rights in execution. It does not operate, when these rights are not exercised before the pre sentation of a petition in insolvency, so as to create in favour of the judgment‑creditor a title which prevails against that of the Official Assignee, under a vesting order in insolvency made after the order of attachment.
Krishnaswami Mudaliar v. Official Assignee of Madras I L R 26 Mad. 673 (F B); Matilal v. Karra Buldin I L R 25 Cal. 179 (P C) ; Goverdhandas Vallabhdas v. Official Liquidator, Electro Metal Refining Co. Ltd, A I R 1930 Born. 16; Re Roundwood Colliery Company, Lee v. Roundwood Colliery Company (1897) l Ch. D. 373 ; re : North Yorkshire Iron Company (1878) 7 Ch. D. 661 and Maneklal Mansukhbai v. Saraspur Manufacturing Co., Ltd. A I R 1927 Bom. 167 ref.
Mazhar Hassanain for Petitioner.
Asrarul Hossain for Opposite‑Party No. 1.
This is an application under section 171 of the Companies Act by a decree‑ holder‑creditor for permission to proceed with the execution of the decree and to realise the decretal amount out of the funds of the Economic Aid Corporation, Ltd., (in liquidation). The petitioner before me, the Chandpur Mills, Ltd., is itself a Company incorporated under the Companies Act, and it obtained a money decree against the said Economic Aid Cor poration, Ltd., (in liquidation), for the sum of Rs. 30,880 on account of arrears of rent and price of articles of a weaving factory purchased from the petitioner‑Company.
2. This decree, it is said, was obtained on the 5th of March 1955, from the Court of the 3rd Subordinate Judge, Comilla, in Money Suit No. 4 of 1954, and it was transferred to the Court of the District Judge, Dacca, for execution on the 10th of March 1955. The District Judge, Dacca, in his turn, transferred the said execution case to the Subordinate Judge, 1st Court, Dacca, on the 16th of March 1955, for execution and the same was registered as Money Execution Case 1Vo. 7 of 1955. Thereafter, on the 17th of March 1955, on the prayer of the petitioner‑Company, the Executing Court issued an order pf attachment for a sum of Rs. 30,880 lying in deposit with the Habib Bank Ltd., Sadarghat Branch, Dacca, in the account of the said Economic Aid Corporation, Ltd., (in liquidation). This order of attachment, 1 am informed, was served on the said Habib Bank, Ltd , on the 18th of March 1955.
3. On the said 17th of March 1955, however, an applica tion for winding up of the aforesaid Economic Aid Corporation, Ltd., was presented before this Court and ultimately, upon the said application, an order for the winding up of the said Company by this Court was made on the 23rd of June 1955.
4. In the said execution proceeding, it appears that on the 26th of March 1955, on the prayer of the petitioner- Company, another order was passed by the Executing Court directing the Habib Bank, Ltd., to send the attached amount to the Executing Court ; but the Habib Bank, Ltd., informed the Executing Court that the amount lying in deposit in the said Bank had also been attached by the Sub‑Divisional Magistrate, South, Dacca, under section 516 of the Criminal Procedure Code, and hence it was unable to comply with the direction of the Executing Court to place the money at the disposal of the said Court. In this state of affairs, the Executing Court directed the petitioner‑Company to move the Court of the Sub- Divisional Magistrate, Dacca, for permitting the Bank to place the amount at the disposal of the Executing Court. Subsequently, it appears, the Official Liquidator appointed by this Court filed objections in the said Execution proceeding, and the Executing Court, on the 14th of April 1956, stayed the said execution proceedings under section 171 of the Companies Act ; hence this application for permission to continue the said execution proceedings.
5. The petitioner claims that by virtue of his decree and the order of attachment he became a secured creditor and is hence entitled to pursue his security, namely, the attached amount. If the petitioner‑Company is, as it contends, a secured creditor, then it is open to it, if it is so desires, to enforce its security with out proving the liquidation.
6. The Official Liquidator, however, opposes this application and contends that the petitioner‑Company can, by no stretch of imagination, be classified as a secured creditor. According to the Official Liquidator, under the provisions of section 168 read with section 232 of the Companies Act, the attachment, if any, effected on the 18th of March 1955, must be held to be void, as the winding‑up commenced under section 168 on the 17th of March 1955. The fact that the order for attach ment was made on the 17th of March 1955, is, according to the contentions of the learned counsel appearing for the Official Liquidator, of no consequence, because the attachment could be taken to be effective only from the date of the service of the order of attachment, namely, the 18th March, 1955.
7. It appears to me that the contentions of the learned counsel for the Official Liquidator must prevail. A secured creditor has, of course, not been defined in the Companies Act but, by reason of the provisions of section 229 of the Companies Act, a secured creditor under the Companies Act must mean the same thing as under the Provincial Insolvency Act, 1920, for, by the said section for the winding up of insolvent companies, the same rules shall prevail and be observed as may be in force for the lime being under the law of insolvency with respect to the estates of persons adjudged insolvent.
8. Under the Provincial Insolvency Act of 1920, a secured creditor has been defined in section 2, subsection (1), clause (e), to mean " a person holding a mortgage, charge or lien on the property of the debtor or any part thereof as a security for a debt due to him from the debtor ". A decree‑holder, having a simple money decree, does not come within this definition, for, he does not by virtue of his decree acquire any mortgage, charge, or lien over any property of the judgment -debtor. The question, however, is whether an attaching creditor acquires any such mortgage, charge or lien over the attached property. So far as the law in India is concerned, it appears that an attachment under the Civil Procedure Code has only the effect of preventing a transfer of the property attached or of any interest therein. Even any attachment, therefore, does not create, in favour of the judgment‑creditor, any mortgage, charge or lien over the attached property which would entitle the judgment‑creditor to claim to be a secured creditor in respect of the attached properties. This is abundantly clear from the language of section 64 of the Civil Procedure Code and authorities are also not wanting in support of this view. In the case of Krishnaswami Mudaliar v. Official Assignee of Madras (I L R 26 Mad. 673 (F B)) a Full Bench of the Madras High Court considered the position of an attaching judgment‑creditor vis‑a‑vis the Official Assignee appointed under the Insolvency Act and came to the conclusion that:
" the making of an order of attachment in favour of a judgment‑creditor obtained under section 268 of the Code of Civil Procedure only operates so as to give the judgment debtor certain rights in execution. It does not operate, when these rights are not exercised before the presentation of a petition in insolvency, so as to create in favour of the judgment creditor a title which prevails against that of the Official Assignee under a vesting order in, insolvency made after the order of attachment ".
Their Lordships of the Madras High Court also relied for this view, on a decision of the Privy Council in the case of Matilal v. Karra Buldin (I L R 25 Cal. 179 (P C)). Their Lordships of the Madras High Court also observed in the concluding portion of the judgment as follows :‑
" If, under the provisions of the present Code, an attaching creditor does not obtain a charge or lien on the attached property, no question, as it seems to us, of the property vesting subject to any equity, in favour of the attaching creditor really arises ".
9. Again, in the case of Goverdhandas Vallabhdas v. Official Liquidator, Electro‑Metal Refining Co., Ltd., (A I R 1930 Bom. 16), the position of an attaching creditor under the Companies Act fell to be considered, and Chief Justice Marten and Murphy, J., came to the conclusion, after a review of a large number of both English and Indian decisions, that the bulk of authority in India appeared to be that technically an attaching creditor is not a secured creditor, although he may have certain rights by reason of his attachment. According to Murphy, J., further more, the law in India with regard to thi3 was well settled and under that law " an attachment creates no charge in favour of the attaching creditor, and that it merely prevents and avoids alienations, and confers no right on the attaching creditor ".
10. In my view, if I am right in my reading of section 229 of the Companies Act, then the position would be the same also by reason of the provisions of section 51 of the Provincial Insolvency Act where it is provided as follows :‑
" (1) Where execution of a decree has issued against the property of a debtor, no person shall be entitled to the benefit of the execution against the receiver except in respect of assets realised in the course of the execution by sale or otherwise before the date of the admission of the petition.
(2) Nothing in this section shall affect the rights of a secured creditor in respect of the property against which the decree is executed.
(3) A person who in good faith purchases the property of a debtor under a sale in execution shall in all cases acquire a good title to it against the receiver ".
According to this, if as a result of the attachment the assets have not already been realised by sale or otherwise in the course of execution before the date‑in the present case‑of the admission of the petition for winding‑up, the attachment would not have the effect of creating any higher right in the judgment‑creditor and he would not be entitled to the benefit of his execution.
11. The learned Advocate appearing for the petitioner Company drew my attention in this connection to a decision of the Chancery Division in re Roundwood Colliery Company, Lee v. Roundwood Colliery Company ((1897) 1 Ch. D 373), where it appears that distress for rent had been levied by the land‑lord between the passing and confirmation of a special resolution for a voluntary winding‑up, and in those circumstances it was held in that case that though the distress had not been completed by sale it would be inequitable not to allow the distress to go on in the absence of any special reasons. The law in India, however, as I have indicated earlier in this judgment, is different. In India, it seems clear that the attaching creditor does not acquire any charge or lien over the attached property, nor does the obtaining of a decree give to the judgment‑creditor any higher right than that of another unsecured creditor.
12. In this view of the matter, the learned Counsel for the Official Liquidator urges that permission to continue the execution proceedings should not be granted, because, if that is done, then it would, in effect, amount to turning an unsecured creditor into a secured creditor after the winding‑up. Accord ing to him, a rigid line is to be drawn up at the date of the winding‑up, and creditors should not be allowed to change their position after that date. In support of this latter con tention, the learned Counsel has relied on the decision in re North Yorkshire Iron Company ((1878) 7 Ch. D 661) and on the case of Maneklal Mansukhbai v. Saruspur Manufacturing Co., Ltd. (A I R 1927 Bom. 167). The case in re North Yorkshire Iron Company does not, in my view, have any application to the facts of the present case. That was a case where leave was given to the lessors to distrain for rent accrued due after the commencement of the winding‑up but such permission was refused in the case of rent accrued due before that time. The case reported in A I R 1927 Bambay 167, however, does support the learned Counsel, and there permission under section 171 was refused in a case where per mission was sought to continue a suit for enforcement of a mortgage, the particulars whereof had not been filed with the Registrar in accordance with section 109 of the Companies Act. But the learned Chief Justice Marten therein indicated that if an applicant elected to confine his suit to a money claim and gave an undertaking that he will not enforce against the company without the leave of the winding‑up Court, permission to continue the suit may be given.
13. Lastly, it is urged on behalf of the petitioner‑company that it would suffer great hardship if it is not permitted to execute the decree it has obtained, as it is itself a trading company and cannot wait indefinitely to recover its decretal dues, particularly since the Official Liquidator does not appear to be taking any steps whatsoever in the matter even though the winding‑up order was made as long ago as the 23rd of June, 1955. It is pointed out to me that under the Companies Act the list of creditors should have been settled within six months of the winding‑up order. In these circumstances the petitioner-Company offers to furnish security in the shape of immovable property, as also to give an undertaking that, if it is permitted to continue with the execution, then if it is ultimately found that the amount that the petitioner‑Company has realised is in excess of the amount that it would be entitled to share in the ultimate distribution of the assets of the Company the excess so found would be refunded by the petitioner‑Company.
14. In the present case, it is true that although the winding up order was made as long ago as the 23rd of June 195, no steps have been taken as yet by' the Official Liquidator for settling the list of creditors or contributories. But nevertheless, in the present state of things, I don't think that I would be justified in granting the permission sought for by the petitioner Company at this stage. In fairness, however, to the creditors of the Company under liquidation, I do feel that steps should immediately be taken by the Official Liquidator to expedite the process of winding‑up.
15. The order, therefore, that I make on this application is to dismiss this application without any order for costs but I also give permission to the petitioner‑Company to renew its prayer by a fresh summons for permission to proceed with the execution of the said decree of no steps are taken by the Official Liquidator for the settlement of the list of creditors and contributories within a period of three months from to‑day.
K. B. A . Application dismissed.
First Appeal No. 125 of 1955, decided on 17th March 1959.
Goods "shipped on deck at shipper's risk " Shipping company not absolved from all liability‑Contract Act (IX of 1872), Ss. 151 & 152.
Where a shipping company carried goods under a Bill of Lading which contained the endorsement " Drums second‑hand; shipped on deck at shipper's risk " and short delivered the goods, it was argued on behalf of the shipping company that on account of the aforesaid entries in the Bill of Lading the shipping company was exempt from liability for the loss or damages arising out of any cause whatsoever.
Held, that the words in the Bill of Lading "at shipper's risk ", did not excuse the carrier of loss due to negligence on their part. The expression did not make the special contract, between the shipping company and the plaintiff, of such a comprehensive nature as to absolve the shipping company from all liability and so as to exclude sections 151 and 152, Contract Act, 1872 from coming into operation.
British India Steam Navigation Co., Ltd., v. T. P. Sokkalal Ram Sait A I R 1953 Mad. 3 distinguished.
Home Insurance Co., Ltd., New York v. Ramnath & Co. A I R 1955 Mad. 602 ; Strana (1937) 130=106 L J P 81 ; C. With Svenssons Travaruaktiebolag v. Cliffee Steamship Company (1932) 1 K B 490 ; Hillas & Co., Ltd. v. Arcos. Ltd., (1932) 38 Com. Cas. 23 (36) and Admostas Shipping Co., Ltd., v. Anglo Saxon Petroleum Co., Ltd. (1958) 1 All E R 725 ref.
S. R. Pal and Syed Muhammad Hussain for Appellants.
S. C. Bose and D. C. Bhattacharyya for Respondent No. 1.
Syed A. B. Mahmud Hossain Government Pleader for Respondent No. 2.
.‑‑This appeal is against the judgment and decree of the Subordinate Judge, 3rd Court, Chittagong, awarding a sum of Rs. 4,554, being the price of 9 drums of castor oil short‑delivered to the plaintiff at Chittagong Port from S. S. Ocean Endeavour.
2. The plaintiff is a registered firm carrying on business at Chittagong. They were the consignees of 25 drums of castor oil shipped at Karachi for being carried to Chittagong by S. S. Ocean‑Endeavour. Defendant No. 1, M/s. Trans‑Oceanic Steamship Co., Ltd., hereinafter referred to as the Shipping Company, are the owners of the said steamship. Defendant No. 2, Messrs Bird & Co., (Pakistan) Ltd., hereinafter referred to as the Agents, are the agents of the Shipping Company. Messrs Queensland Insurance Co., Ltd., and Federation of Pakistan are defendants Nos. 3 and 4 respectively.
3. The plaintiff's case is that out of the said 25 drums of castor oil shipped at Karachi only 16 drums were delivered to them at Chittagong Port and that the remaining 9 drums were not traceable and hence short‑delivered. The suit was filed for recovery of Rs. 5,009‑6‑6. During trial, the name of the Queensland Insurance Company was struck off from the plaint at the request of the plaintiff.
4. Defendants Nos. 1, 2 and 4 contested the suit. Defend ants Nos. 1 and 2 disclaimed their liability for the amount claimed and stated:
(1) that the entire consignment of 25 drums had landed, some under mark and some under Nil ' mark, and (2) that the Bill of Lading was subject to shipper's risk and hence they were not liable for loss or damage.
The defence of the Federation of Pakistan was that the Jetty Authorities were not at all liable for the short‑delivery.
5. The only contest between the parties was with regard to the liability of defendants Nos. 1 and 2 for the price of 9 drums short‑delivered.
6. The learned Subordinate Judge decreed the suit for a sum of Rs. 4,554 only. Hence this appeal by defendant No. 1, the Shipping Company, and defendant No. 2 their agents.
7. Mr. Pal, the learned Advocate for the appellants, has contended that, on the evidence adduced in this case, the trial Court should have held that these 9 drums had landed under Nil ' mark. The correspondence between the parties, however, does not support this contention. On 16‑7‑53, the plaintiff wrote to the Agents:‑---
" In this regard we have to advise you that the above referred steamer has completed discharge and in spite of every effort the above referred 9 (nine) drums castor oil out of the above consignment are still untraceable, and we cannot ascertain its damage.
In this connection further we should like to let you know that you will please go through the records and let us know at the earliest if the consignment under reference is landed in full ".
On 25‑7‑53, they again wrote : .
" In this connection we have again to advise you that despite our every effort 9 drums of castor oil ex : the above are still untraceable and it is extremely regrettable to note that in spite of our earnest efforts you have not clarified as yet whether the consignment has been landed in full, and we cannot ascertain its damages ".
On 25‑8‑53, they again repeated the above request. On 26‑8‑53, the Agents wrote to the plaintiff as follows :‑---
" in our letter of the 12th August, 1953, we have very clearly mentioned that your entire consignment has been dis charged in full under Nil ' and illegible marks. The steamer is not responsible for the shortage of contents or effacing of marks and numbers ".
On 28‑8‑53, the plaintiff requested the Deputy Traffic Manager to issue short‑delivery certificate in respect of those 9 drums. On 4‑9‑53, 'the Deputy Traffic Manager replied to them as follows:‑
" The 9 drums are neither in landing tally nor lying in shed.
A short‑landing certificate will be issued to you upon finaliz ation of out‑turn report if the same is actually found short at that time ".
On 18‑11‑53, the Agents wrote to 'the plaintiff that they had countersigned the short‑landing certificate. In the said certificate, their endorsement was to the following effect :‑
" Short‑landed by main marks but landed by ' NIL ' marks. Consignee to take delivery".
On 12‑12‑53, the plaintiff wrote to the Agents:
Further to our correspondence resting with you, we have to inform you that despite our every effort 9 (nine) drums of castor oil ex : the above vessel have not been delivered to us. Further, it is now, abundantly clear that 9 drums of castor oil have been short‑landed from the vessel as per your letter, dated 18th November, 1953. In reply to last para. of your above letter, we would like to let you know that we have already clarified our position as per our letter No. B/3/225‑53, dated 25th August, 1953, addressed to you, that the drums lying in Jetty K ' Shed do not belong to us, and do not form part of our consignment ; contents, marks and the number of packings are also not ours, which please note ".
On 2‑1‑54, the Deputy Traffic Manager issued a short‑landing certificate. On 4‑5‑54, the plaintiff wrote to the Agents claim ing Rs. 5,009‑6‑6 as damages. On 8‑5‑54, the Agents wrote to them that they had referred the matter to the owner. As the plaintiff failed to get any relief either from the owner or the Agents, they filed this suit.
8. The above correspondence clearly shows that the plaintiff was ready and willing to take delivery of the drums even under Nil ' marks and even asked the Agents to identify the said drums. The Agents however merely persisted in saying that the goods had landed under Nil ' mark. They however did not even try to identify the said drums which, according to them, had landed under Nil ' mark. The conduct of the Agents in the whole matter was far from satisfactory. It is really regrettable that the Agents did not act in a fair and businesslike manner in this case. The out‑turn report also shows that out of the plaintiff's consignment 9 drums landed short. In view of the evidence, both oral and documentary, we are satisfied that the said 9 drums did not land at all at the Chittagong Port and hence the plaintiff was unable to take delivery of the same.
9. Mr. Pal has next contended that these drums were carried on the deck at the risk of the shipper and hence the Shipping Company or their Agents were not liable for the loss. In support of his contention, he has relied on the following endorse ment in the Bill of Lading:
" Drums second‑hand ; shipped on deck at shipper's risk ".
He has argued that these drums of castor oil, being carried on deck at shipper's risk, are exempt from the Carriage of Goods by Sea Act on account of the definition of " Goods " con tained in Article 1, sub‑clause (c). He has further argued that on account of the aforesaid entries in the Bill of Lading the Carriers are also exempt from liability for the loss or damages arising out of any cause whatsoever. In short, his argument is that, since the Carriage of Goods by Sea Act does not apply to this case, the only law applicable in a matter like this is the English Common Law and under English Common Law it is open to the carrier to contract himself out of the liability by a special provision in the Bill of Lading. This contention finds support from the decision in the case of British India Steam Navigation Co., Ltd., v. T. P. Sokkalal Ram Sait (A I R 1953 Mad. 3). In the above case, the exemption clause was as follows:
" Notwithstanding anything to the contrary herein contained live animals and/or deck cargo are received, kept and carried at the sole risk of the owner thereof, and neither the carrier, (which expression includes both the owner of the ship and the operating ship‑owner for the time being) nor any stevedors, wharfinger nor any agent or servant of any of them nor any other person whomsoever for whom the carrier may be responsible shall be under any liability whatever for the goods, nor for any loss or expense connected therewith how ever caused and whether due to negligence, unseaworthiness or otherwise. Shippers and all concerned are, therefore, advised to see that their insurance policies cover all and every risk whatsoever whether ashore or afloat and are made without recourse to the carrier or any of the parties aforementioned ".
A Division Bench of the Madras High Court held, on the strength of the above clause, that the carriers were not liable for the loss even if it was due to negligence on their part or on the part of their servants. It was further held that such a contract would not be governed by sections 151 and 152 of the Contract Act.
10. The instant case is clearly distinguishable from the above Madras case, because there is no such comprehensive clause here. On the other hand, the endorsement in this Bill of Lading is somewhat similar to that in the case of Home Insurance Co., Ltd., New York v. Ramnath & Co‑, (A I R 1955 Mad. 602). In the case of Home Insurance Co., Ltd., the Bill of Lading contained a condition that the goods were "shipped on deck at shipper's risk." Basheer Ahmed Sayeed, J., observed at page 604:
" Learned counsel next invited my attention to a decision of a Bench of this Court in British India Steam Navigation Co., Ltd., v. Sokkalal Ram Sait. In that case, there was a comprehensive clause which had excepted the carrier from liability under any circumstance whatsoever. The Court, inter preting the scope and operation of such a comprehensive clause, came to the conclusion that the English Common Law applied and sections 151 and 152, Indian Contract Act, could not affect the liability of a common carrier in the view that the liability of a common carrier for the loss, injury or delay, in respect of the goods carried, might be varied by a contract and that the contract before them was not opposed to public policy and that section 23, Indian Contract Act, did not apply.
The Bench was of the opinion that the bill of lading relieved the ship‑owner from any liability with regard to showing how the loss had occurred. The case‑law on the subject has been elabo rately discussed in that decision and it is unnecessary for me to traverse the entire field. So far as the facts in the present case before me are concerned, it cannot be said that the special contract between the shipping company and the plaintiff R is of such a comprehensive nature as to absolve the ship ping company from all liability and so as to exclude sections 151 and 152, Indian Contract Act, from coming into operation ".
11. In our opinion, the above observations are fully appli cable to this case. We would also like to point out that here also there was short‑delivery of 9 drums and it was not a case of total loss as was the case in British India Steam Navigation Co., Ltd. The defendant's case throughout was that some drums had landed under mark and some had landed under Nil ' mark. For the first time they took the defence in the written statement that they were not at all liable for this loss. For the above reasons, we hold that the decision in British India Steam Navigation Co., Ltd. is not applicable to this case. In this connection, the following observations of Langton, J., in Strana (1937) 130=106 L J P 81, may be aptly quoted:
" I can quite easily read the words at charterer's risk ' to mean that the goods‑owner takes the chance of some imperfectly ascertained cause of action. But to say that it confers on the shipowners the right to claim exemption from liability in every case when the cause of the loss is unknown seems to me to be altogether too benevolent construction in favour of the party who has inserted the exception. Pushed to its logical conclusion, this argument would appear to go to the length of saying that these words excuse a bailee from giving any explanation of the loss of goods entrusted to him ".
Similarly, in C. With Svenssons Travaruaktiebolag v. Cliffee Steamship Company ((1932) 1 K B 490), Wright, J., while considering the question of a carrier's liability in carrying goods under a contract which contained a similar exemption clause, held that the words in the charter‑party, " at charterer's risk ", standing alone, did not excuse the carrier of loss due to negligence on their hart. In the light of the aforesaid decisions, we hold that the Shipping Company or their Agents cannot be exempted from liability of short‑delivery in this case.
12. Before leaving this point, we may observe that the Paramount clause in the bill of lading was as follows:
" All the terms, provisions and conditions of the Indian Carriage of Goods by Sea Act, 1925, and the Schedule thereto are to apply to the contract contained in this Bill of lading, and the Company are to be entitled to the benefit of privileges, rights and immunities contained in such Act and the Schedule thereto as if the same were herein specifically set out. If anything herein contained be inconsistent with the said provisions it shall to the extent of such inconsistency and no further be null and void. It is hereby, expressly further agreed in pursuance of the provisions of Article 7 of the Schedule to the said Act that the carrier's liability, prior to the loading on, and subsequent to the discharge from the ship, shall be governed by the conditions and exceptions of this Bill of Lading ".
13. Mr. Pal has argued that the provisions of the Carriage of Goods by Sea Act do not apply to cargo which by contract of carriage is being carried on the deck. Hence his contention is that this Paramount clause will not be of much assistance to the plaintiff. We are unable to accept this argument of Mr. Pal. The Paramount clause expressly says that if any term of the bill of lading is repugnant to the Carriage of Goods by Sea Act to any extent, it shall be void to that extent and no further. Simply because the Carriage of Goods by Sea Act does not apply to deck cargo, it cannot be said that none of the provisions of the Act are applicable. The Paramount clause clearly indicates that every part of the Act which is capable of being applied will be deemed to be incorporated. In other words, the subsequent provision on which the ship owners rely will be qualified by other provisions of the Act. Such a method of construction does not seem to be unreasonable. To say that the provisions of the Act shall not at all apply to the bill of lading would really render the Paramount clause nugatory. This certainly was not the intention of the parties. As stated by Lord Wright in Hillas & Co., Ltd., v. Arcos, Ltd. ((1932) 38 Com. Cas. 23 (36)) :‑
" the duty of the Court to construe such documents fairly and broadly, without being too astute or subtle in finding defects but, on the contrary, the Court should seek to apply the old maxim of English Law verva ita Bunt intelligenda ut res magis valeat quam pereat ".
See also Admastos Shipping Co., Ltd. v. Anglo‑Saxon Petroleum Co., Ltd. ((1958) 1 All E R 725). In view of this paramount clause, the Shipping Company cannot escape liability for loss due to their negligence. We are, therefore, unable to accept the extreme argument of Mr. Pal that the shipowner was exempted from all liability whatsoever for the loss of the 9 drums and that they were also excused from giving any explanation for the loss.
14. The quantum of damage awarded by the learned Judge has not been challenged before us.
15. In these circumstances, we hold that the learned Judge has rightly decreed the suit against defendant No. 1, the Shipping Company, and defendant No. 2, their Agents.
16. Lastly, Mr. Pal has contended that the learned Judge was not justified in ordering that the costs awarded to defendant No. 4 was to be recovered from defendants Nos. 1 and 2. Defendant No. 4 was not added as a party in the suit at the instance of defendants Nos. 1 and 2. The plaintiffs made this defendant No. 4 a party in the suit of their own accord. Hence we see' no reason by the plaintiff should not be made liable for the costs awarded to defendant No. 4. The plaintiff, therefore, should pay the costs of defendant No. 4.
17. With the above modifications, we affirm the judgment and decree of the learned Subordinate Judge and dismiss this appeal with costs.
18. We do not think there was any necessity for defendant No. 4 to appear in this appeal and hence we do not allow them any costs of this appeal.
‑I agree.
K. B. A. Appeal dismissed.
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