Find a Lawyer

Second Appeal No. 3 of 1985, decided on 2nd October, 1986

‑‑‑Art. 31‑‑Import of goods by sea‑‑Short delivery of goods‑‑Suit for compensation against carrier‑‑Limitation, starting point‑‑Limitation period of one year prescribed under Art. 31 for institution of suit against carrier for compensation for short delivery of goods, held, would start running either from date when Port Trust, being statutory bailee and agent of carrier, had issued short landing certificate to consignee or from date when consignee's claim of compensation was finally refused by carrier and not from date when vessel carrying goods arrived at port.

1985 C L C 360; Abdul Jalil Chowdhury v. The Muhammadi

Steamship, Co. Ltd. and others P L D 1961 S C 340; P L D 1975 Kar. 815; P L D 1981 S C 340 and P L D 1961 S C 340 ref.

Badarudauja for Appellant.

Ibrahim Pishori for Respondent.

Date of hearing: 1st October, 1986

This appeal is directed against the judgment of VIIth Additional District Judge, Karachi, whereby the judgment and decree passed by XIX Civil Judge, Karachi, was set aside and the suit of the appellant was dismissed.

2. The facts giving rise to this appeal are that on 29‑1‑1975 the appellant had filed a suit for recovery of Rs.4,456.55. The appellant had imported second hand clothing vide Bill of Lading Nos. 44 and 68, dated 30‑9‑1973 through respondent No. 1 which is a navigation company. The vessel carrying the goods arrived at the port of Karachi on 24‑10‑1973 and discharged the goods in the care and custody of K.P.T.

The appellant received only 8 bales out of 15 bales and, therefore, informed the respondent No. 1 about the said short delivery. On 1‑3‑1973 respondent No. 1 informed the appellant that the contents of 3 bales were refilled in gunny bags which were available for delivery. Consequently, the appellant contacted K.P.T. but found that these bales were different and, therefore, did not take delivery.

On 11‑3‑1974, K.P.T. informed the appellant that one bale was traced out. The appellant, after verifying that the bale was his, took the delivery. On 15‑3‑1974, the K.P.T. issued short landing certificate to the appellant. Hence, he lodged claim with respondent on 17‑4‑1974 for a sum of Rs.4,456.55. On 6‑5‑1974, the respondent No. 1 advised the appellant to submit two separate claims. Consequently, on 20‑12‑1974 the respondent submitted such separate claims. These claims were refuted by the respondent No. 1 on 2‑1‑1985 on the ground that his claim was time‑barred. Hence the suit.

3. The suit came to be contested only by respondent No. 1. The defence of the respondent No. 1 was mainly based on the plea of limitation. It was stated that the suit was filed beyond the period of more than one year from the date when the period of limitation had started running and, therefore, it was time‑barred in view of the Article 31 of the Limitation Act.

4. The trial Court settled the following issues and decided all these issues in favour of the appellant and decreed his suit:‑‑--

"(1) Whether suit is not maintainable against defendant No. 1

(2) Whether suit is time‑barred

(3) Whether the six bales out of 15 bales have been shortlanded

4) Whether the defendant No is liable to pay to the plaintiff Rs.4,456.55

(5) Whether the plaintiff is entitled to receive interest upon the decretal amount from the defendant with effect from the date of the filing of the suit till the realisation of the decretal amount

(6) What should be the order

(7) Whether the 4 bags were refilled and plaintiff refused to accept delivery of refilled bags, if so, its effect "

5. An appeal was filed by respondent No. 1 in District Court, Karachi, which came to be heard by VIIth Additional District Judge who disagreed with the findings of the lower Court on the issues regarding limitation and held that the suit was time‑barred and dismissed the suit on that score only. He did not disturb the findings of the lower Court on the remaining issues rather concurred with its findings thereon. Against this judgment of the first appellate Court, the present appeal has been filed by the plaintiff. No cross‑appeal has been filed by the respondent No. 1 regarding the findings on the remaining issues. Hence, I will confine myself to the point of limitation.

6. I have heard Mr. Badarudduja, Advocate for the appellant, and Mr. Ibrahim Pishori, Advocate for respondent at length.

7. Admittedly the vessel arrived at the port of Karachi on 24‑10‑1973 and discharged the goods including the disputed consignments. The appellant informed the K.P.T. on 16‑1‑1974 that 7 bales were short delivered to them. Similar intimation was given by the appellant to respondent No. 1.

8. Advocates of both the sides conceded that they were unable to give or to point out from the record the exact date on which delivery of these 3 bales was made to the appellant. They, however, stated that the date of delivery was a date after 24‑10‑1973 and before 16‑1‑1974.

9. In reply to the appellant's letter, Exh. 24, addressed to respondent No. 1 about the short delivery, the respondent No. 1 sent a letter on 1‑3‑1973 which is Exh. 26 wherein they have pointed out that the material of 3 bags had scattered and was refilled in 4 bags and that the appellant should take its delivery. The appellant after verifying the same refused to take delivery of the refilled bags as these did not contain the goods imported by him. The appellant, on 11‑3‑1974, received a letter from K. P. T. informing them about location of one more bale. The appellant verified this bale and accepted its delivery after recognizing the same. On 15‑3‑1974, short-landing certificate, Exh. 8, has been issued by the K.P.T.

10 Mr. Badarudduja, who appeared before me, submitted that his suit was within time as it was filed within the period of limitation prescribed by Article 31 of the Limitation Act, while Mr. Pishori argued to the contrary, and submitted that the suit was filed after passage of more than one year and was, therefore, barred under the said Article.

It will be useful to reproduce Article 31 of the Limitation Act which reads as follows: ‑‑

"31‑Against a carrier One year When the

for compensation for goods ought

non‑delivery of, or to be delivered."

delay in delivering goods.

11. From the plain reading of the above Article it is quite clear that a suit against a carrier for compensation for short delivery of is to be brought within one year from the date when the goods ought to be delivered".

It was contended by Mr. Pishori that since the vessel carrying these consignments arrived at Karachi port on 24‑10‑1973, therefore, this is the date on which the bales ought to have been delivered and the suit for non‑delivery of the remaining bales should have been instituted within one year from 24‑10‑1973. It was this date on which the consignee became aware of the loss of his bales which were short landed.

12. As against this Mr. Badarudduja, the Advocate for the appellant, submitted that the period of one year prescribed under Article 31 of the Limitation Act started from the date when the respondent No. 1 finally rejected the claim of the appellant on 2‑1‑1975. In the alternative, he argued that even if that date is not accepted as starting point of limitation then also the period of limitation should be taken to have started from 15‑3‑1974 when short landing certificate was issued by K.P.T. to the appellant. Hence, either it was the former date on which the claim of compensation was finally refused by the respondent No. 1 or it was the latter date on which the K.P.T. issued short landing certificate which is to be treated as the date on which delivery ought to have been made and the appellant had come to know for certain that the respondent was not in a position to offer the delivery of the lost consignment.

13. The expression "when the goods ought to be delivered" used in Article 31 of the Limitation Act has been subject of discussion in number of cases. The most pertinent ruling on this point is the one given by my brother Mr. Justice Saeeduzzaman Siddiqi in the case of National Insurance Corporation v. P.N.S. C. reported in 1985 C L C 360.

In this ruling the entire case law on this point had been referred and it was held that the starting point of limitation under Article 31 is the date on which the consignee had notice that the delivery cannot be given to him.

In the case of Abdul Jalil Chowdhury v. The Muhammadi Steamship Co. Ltd. and others reported in P L D 1961 S C 340 it has been observed as under:‑‑

" ------We may point out that Article 31 of the Limitation Act is in almost identical terms with clause 6, and we see no reason to place on his clause an interpretation different from that which has been placed on Article 31. There are a large number of decisions under this Article wherein it has been held that limitation starts only when the Railway authority either refuses, or expresses its inability, to give delivery. There was almost a consensus of opinion on the point in pre‑partition India and after partition the same view was taken in the West Pakistan High Court vide Firm Muhammad Saddiq Imam Din v. The Federation of Pakistan, a decision of S.A. Rehman, C.J. and A.R. Changez, J, where a number of cases are cited. Unfortunately, these decisions do not explain the basis on which the conclusion could be reached, for Article 31 does not speak either of refusal or of inability to deliver but all these decisions can be shown to be correct on the ground that in these cases there was correspondence going on between the carrier and the consignee, to take delivery, so that there was impliedly an extension of time till there was refusal to give delivery or expression of inability to do so."

14. In the case of National Insurance Corporation v P. N.S.C referred to above it was held as follows:‑‑--

"From the above documents, it is sufficiently established that the matter was under negotiation with regard to the delivery of the two missing cases until 1‑8‑1982 when the Karachi Port Trust issued a short landing certificate to the consignee confirming the short landing of these two cases. There is nothing on record to show that after 1st August, 1982, there was any further promise on the part of defendant to trace out the said two missing cases and offer their delivery to the consignee. In these circumstances it is obvious that the consignee had notice on 1‑8‑1982 when the short landing certificate was issued to them by Karachi Port Trust, that the defendant was not in a position to offer them delivery of the two missing cases and, therefore, the period of limitation started running on 1st August, 1982. The suit for compensation of non‑delivery of the said consignment, accordingly, should have been instituted within one year of the said date, namely, 1st August, 1983."

15. In the present case it would appear that the consignee had written to the carrier as well as K.P.T. on 16‑1‑1974 that there was short delivery of 7 bundles. In reply the carrier informed the consignee on 1‑3‑1974 that the 3 bales which were reported to have been short landed were in fact found in loose condition and were refilled in four gunny bags and were lying in 16 Shed Cage Keamari. He was, therefore, asked to arrange for its clearance. In other words, the respondent No. 1 made an effort towards the search and delivery of these allegedly short landed bales. The appellant after verifying these bales disclaimed them and repeated his request on 6‑3‑1974. On 11‑3‑1974 a letter was received from K.P.T. wherein one more bale was pointed out to the appellant which he accepted as already shown. Hence, it would appear that the respondent No. 1 had not shown his inability to the appellant to offer the delivery of the missing bales till the short landing certificate was issued by K.P.T. on 15‑3‑1974 or at least till he himself advised the appellant to take delivery of 4 bags on 1‑3‑1974. Both these dates till when correspondence regarding delivery was going on are within one year before the filing of the suit which was filed on 29‑1‑1975. Hence, the suit was within the period of limitation.

16 It was next contended by Mr. Pishori that the K.P.T. was not an agent of the carrier and, therefore, as soon as the goods were discharged at Karachi on arrival of the ship the responsibility of the carrier had come to an end and it should be presumed that so far as the carrier is concerned, the notice of short landing was complete and that if any time was consumed by the K.P.T. in searching out the short landed goods and delaying the delivery hereof, the carrier was not responsible for it. Since, according to him, the K.P.T. was the agent of the consignee, therefore, the period of limitation so far as the suit against the carrier was concerned, had started as soon as the ship has arrived at the port.

As against this Mr. Badarudduja had contended that the K.P.T. was the agent of the carrier and whatever delay it committed in searching out the goods or delivering the same to the consignee was to be treated as in his capacity of the agent of the carrier for which the carrier was to be held liable. The period of limitation in that case would start running only when the K.P.T. had finally showed its inability to deliver the goods.

17. A host of rulings was cited before me in this connection. The most important of them are P L D 1975 Kar. 815 and P L D 1981 S C 340.

I have gone through all these rulings. According to me, the consensus of the legal decisions is that the K.P.T. is a statutory bailee. It is agent of the carrier for certain purposes and agent of the consignee for certain purposes. Its capacity changes according to the circumstances of each case.

In the case of Abdul Jalil Chowdhury P L D 1961 S C 340, which related to Chittagong Port Trust, it was held that it was a statutory bailee and agent of carrier and not an agent of the consignee. This was more so because the Steamship Company had directed the K.P.T. not to deliver the goods to the consignee without payment.

18. Looking to the facts and circumstances of this case, it would appear that when the K.P.T. admittedly acted as agent of the carrier when it delivered 8 bales to the consignee on 24‑10‑1973 then it is logical to hold that he had also acted as agent of the carrier on 1‑3‑1974 when the appellant was shown the 4 bags which he refused to accept and also on 11‑3‑1974 when it searched out and delivered one more bag to the appellant and finally on 15‑3‑1974 when it issued the short landing certificate.

19. I, therefore, hold that the learned first appellate Court was not justified in coming to the conclusion that the period of limitation started running from 24‑10‑1973 when the vessel had arrived at Karachi or even from 16‑1‑1974 when the appellant gave intimation of short landing and such finding cannot be sustained. These are the reasons for my short order by which I allowed the appeal and set aside the judgment of the first appellate Court and restored that of the trial Court and decreed the appellant's suit with costs.

H.B.T./Y‑1/K Appeal allowed.

Find a Lawyer Near You

Dealing with a matter like this? Connect with a verified advocate in your city — free on SJP Lawyers Directory.