The Trustees of the Port of Madras vs Nizam Paper and Board Mills Limited

The only question raised by the first defendant/appellant is that the suit is barred by time. The first respondent filed the suit for recovery of a sum

of Rs.56,400 together with interest at 12% per annum being the value of 83 bales of computer paper print outs. The first respondent imported 520

bales of waste paper consisting of 260 bales of pure white paper cuttings and 260 bales of computer paper print outs. On 10.11.1981, the

clearing agent of the respondent filed import application and cleared 437 bales, as against the total quantity referred to above leaving a balance of

83 bales (61 bales of pure white cuttings and 22 bales of computer print outs). The respondent''s clearing agent preferred an enquiry for the

untraced bales. The clearing agent was informed that the entire cargo was discharged at Madras Port Trust as per their records. The appellant

instead of entertaining the enquiry referred the clearing agent on 04.12.1981 to some cargo lying in the damaged condition. On inspection this was

found by the clearing agent as not being the goods covered by the import application. Evenafter their rejection the enquiry was not proceeded with,

but returned. Therefore, the first respondent resubmitted the enquiry form. The appellant again pointed to the damaged cargo as though that

represented the untraced bales. The clearing agents of the first respondent again inspected the cargo in the warehouses as directed by the appellant

and informed them that they did not correspond to the cargo covered under the import application dated 10.11.1981 and that they were waste

card board while what was imported by the first respondent were white paper cuttings and computer print outs. They also called upon the

appellant to issue proper certificates to enable the first respondent to prefer claims on the steamer agents. Since the appellant failed to do so but

tried to cover up the default in delivering the 83 bales, the suit was filed for the market value of the 83 bales that were short delivered.

As per the written statement of the appellant in defence to the above claim it was admitted that only 437 bags were delivered. But subsequently,

when the appellant called upon the clearing agent of the first respondent to clear the 83 bales, no steps were taken for clearing them. According to

the appellant/first defendant the enquiry presented on 24.11.1982 was time barred and therefore the question of admitting the enquiry or issuance

of a short-landing certificate did not arise. It was also the defence that the clearing agent having rejected the 83 bales on 05.12.1981; cause of

action arose on that date itself and the suit filed on 28.08.1982 was time barred. The second defendant namely the insurance agent also filed a

written statement in which it was stated that the first respondent did not submit the relevant documents for survey to be considered by the first

respondent and also refused to accept the loose card-boards and the card-board papers lying in loose and damaged condition, no monetary claim

was made by the first respondent, nor did they co-operate with the insurer for conducting the survey. Therefore, while the insurer could not

conduct the survey and insure the damage, it was not possible to ascertain that the bales were lost while they were in the custody of the carriers.

For all these reasons, the insurer also prayed for dismissal of the suit.

The learned VIII Additional Judge who tried the suit framed as many as six issues and after consideration of both oral and documentary

evidence came to the conclusion that the suit was not barred by time and that the first respondent was entitled to decree as prayed for.

As stated above the main and the only thrust of the argument on behalf of the appellant is that the claim was time barred. The learned counsel

referred to Section 43(2) of the Major Port Trust Act hereinafter referred to as the Act which absolves the Board of Trustees of the relevant port

trusts of responsibility for loss, destruction, deterioration or damage, unless notice has been given within the time prescribed by regulations made in

this regard. He also referred to Section 120 of the Act which prescribes a period of limitation for filing a suit or intiating proceeding against the

Board. As per Section 120 of the Act no suit or proceeding can be commenced until the expiry of one month after the statutory notice in writing or

after six months after the accrual of the cause of action. The learned counsel also referred to Port of Madras (responsibility for goods) Regulations

1975 (hereinafter referred to as the Regulations) which are made under the powers conferred by Section 176 read with Sections 42 and 43 of the

Act. Regulation 4 states that no responsibility shall attach to the Board u/s 43 after a period of seven clear working days from the date of charge of

goods by the Board in respect of such goods. Reliance was also placed by the learned counsel for the appellant on the decisions of this Court

reported in The Trustees of the Port of Madras v. Mettur Chemical and Industries Limited, Salem, 1968 (I) MLJ 162 and Messrs. Swastik

Agency, Madras v. The Madras Port Trust and another, 1967 (II) MLJ 109. Therefore, according to the learned counsel for the appellant, the

suit, being filed by the first respondent after the time stipulated by the Act and the. regulations framed herein was clearly time barred and the

judgment of the Court below has to be set aside.

The learned counsel for the first respondent on the other hand referred to certain provisions in the Madras Port Trust Traffic Manual which deal

with the procedure to be adopted by the Port Trust where the enquiry is filed. He referred to para 3.2 of the Traffic Manual which deals with

enquiry. When in the course of delivery the package is not found the enquiry commences with the consignee filling up the printed enquiry form.

Upon receipt of the form the Shed Master has to take several steps after which the tracer shall be deputed to physically check the shed, the

overflow area or any other place where the cargo might have been transferred and report the traceability or non-traceability of the package. If the

packages are traceable the Shed Master shall arrange to issue ''A'' certificate intimating the availability of the package and location. If the packages

are not available, a ''B'' certificate is issued. If the package had been taken over into the Port Trust''s custody but lost thereafter, ''C'' certificate is

issued.

In this case none of the certificates was issued which means the enquiry itself was not complete and therefore, there was no question of the suit

being barred by time. Further the learned counsel submitted that though the first inspection of the cargo pointed out by the appellant was made in

1981 and the material lying in loose condition in the S.6 warehouse were rejected as not being covered by the relevant import application that

would not be the starting point of the limitation since subsequent to that there were several letters between the parties. The appellant instead of

issuing a ''B'' certificate intimating short delivery insisted on acting as though the cargo had been delivered pointing again to certain loose material as

goods covered by the relevant import application. By Ex.A14, dated 10.3.82 the appellant stated that the 83 bales were was lying in a loose

condition is the consignment covered by the relevant import application and if they were not cleared at an early date they would be sold in public

auction. The suit therefore was filed within six months from 10.3.1982 after giving one month''s notice which is Ex-A6 dated 22.4.1982. Since the

suit was filed in time, the learned counsel for the first respondent submitted that there was no error in the judgment of the trial Court. The learned

counsel also referred to the following decisions viz.,

(1) The Shipping Corporation of India Ltd., Bombay and Another Vs. The Union of India and Another, ; (2) The Trustees of the Port of Madras

by its Chairman v. M/s. Roberts Maclean and Company Limited, Calcutta (with branch office at Madras) and another, 1973 (II) MLJ 455; (3)

Trustees of the Port of Madras Vs. Union of India (UOI), ; (4) Trustees of Port of Madras v. Union of India Owning S. Rly. and 2 others, 1972

TLNJ 112

The only issue that has to be decided is whether the suit is time barred since no other ground was raised. The Court below on this issue held that

only 10.3.1982 which is the date of Ex-A14, the appellant had kept insisting that the cargo was in the ware house and therefore unless and until the

first respondent knew that the cargo was either lost or untraceable the cause of action did not arise. Therefore, the suit filed within six months of

Ex-A14 was time barred. The computation of limitation for filing suits against the Board is provided u/s 120 of the Act which gives the party

aggrieved six months time after accrual of the cause of action by giving one month''s notice in writing to the Board. When did the cause of action

arise ?

The Madras Port Trust Traffic Manual gives the procedures and practices to be adopted for movement of cargo and consequential handling.

When a consignee finds that some of his packages are not delivered, he files an enquiry form. In this case, the enquiry form has been filed by the

consignee who received only 437 bales out of the 520 bales that were imported by him. The bales as stated earlier ought to have contained white

paper cuttings and computer-paper print outs. The enquiry form which is filed as Ex-A2 brought to the notice of the appellant that 83 bales

covered by import application No.651 of 1961 dated 10.11.1981 are not traceable in the harbour premises. In the printed enquiry form there is

also a request that when traced the packages may be pointed out or necessary certificates may be issued. These certificates are issued in the form

prescribed. From para 3.27 in volume 2 of the Madras Port Trust Traffic Manual the nature of these certificates can be known.

''A'' certificate is issued for packages uncleared and that have been traced and are available for delivery. ''B'' for packages which have been

ascertained to have been short landed or which, the Trust sees reason to believe have not come into its custody and ''C'' certificate for packages

which have come into its custody but are not available for delivery.

Therefore, on receipt of the enquiry form, the appellant ought to have issued one of the three certificates. In spite of several requests made by the

first respondent the appellant did not issue either ''A'', ''B'' or ''C'' certificate. According to the appellant 83 bales were available at S6 ware house

and they wrote several letters to the clearing agent of the first respondent including Ex-A12 dated 16.1.1982. To this letter the clearing agent of the

first respondent sent a reply under Ex-A13 that the ""goods'' in S.6 ware house are card board not answering to the description of the waste paper

covered by the import application. Following is the extract from Ex-A13:

The loose wastepaper in WO III shed, now being brought up for the first time in your communication cited, is not connected at all with cargo ex

the subject vessel, a fact already confirmed by the Balance Clerk in WO IV in his note dated 4.12.81 that the ""83 bales are lying at S6WH as

loose and damaged condition"", a statement we had already denied after inspection on 5.12.1981. The new reference to WO III has, therefore, no

relevance to the issue.

In this communication, the appellant was also put on notice that out of the manifested quantity of 520 bales of 510 had been landed in sound

enough condition and therefore there should be no difficulty in delivering the 83 bales or to account for the same. The Port Trust was also called

upon to arrange for delivery of the bales or to issue a ''B'' certificate. To this the appellant wrote Ex-A14 dated 10.3.1982 reiterating that the 83

bales of waste paper card board lying in S6 ware house and now transferred to NI warehouse is alone the consignment covered by

I.A.No.651/61. It was after this that the first respondent realised that the appellant had either lost the cargo or could not trace the cargo and

therefore Exhibit A-15 was issued by the clearing agent of the first respondent and Exhibit A-6 Suit notice was issued on 22.4.1982 giving one

month''s notice and the suit was filed on 28.8.1982 within six months from Exhibit A-14. As contended by the learned counsel for the respondent,

once the appellants received the enquiry form, they should have issued the appropriate certificate which would have made known the actual state

of affairs with regard to the cargo and that without issuing the certificate, it is not possible for the consignee to know the actual position of the

cargo. The reference by the appellant to the Regulation is of no avail since the Regulation cannot prevail over the Section which clearly sets out the

limitation. In the decision reported in Trustees of Port of Madras v. R. Maclean & Co., Ltd. 1973 (II) MLJ 455, a Division Bench of this Court

held that the claim against the Board of Trustees must be within six months of the accrual of the cause of action and since it was not filed within six

months from the date of issue of the ''C'' certificate, the suit was barred by limitation. In that case, the consignee held that the final reply of the Port

Trust was only on 13.2.62 and therefore, the issuance of ''C'' certificate which was earlier cannot be the starting point of the limitation. The Division

Bench held that the accrual of the cause of action is the date of the issue of the ""C"" certificate or the date of receipt, but not later. But in that case,

the suit was filed six months after the date of receipt and therefore rejected the suit as time barred. In this case it has been factually shown that the

Port Trust had not issued the appropriate certificate in spite of repeated requests by the first respondent. Similarly, in the decision reported in

Trustees of the Port of Madras Vs. Union of India (UOI), , a Division Bench of this Court had an occasion to consider when the cause of action

for damages against the Port Trust arises for non delivery of goods on the date ''C'' certificate is issued. The Division Bench held that the date of

''C'' certificate would be the relevant date. The following is the extract of the judgment:

The correspondence between the parties shows that since November 1956 the railway insisting upon delivery and the Port Trust was putting off

giving delivery on the excuse that it was searching the godowns warehouses for the package in question. Ultimately, the railway called upon the

Port Trust to issue what is called ''C'' certificate by which the Port Trust declares that goods landed had been lost while in its custody. Such a ''C''

certificate was issued on 15.4.1957. The certificate runs in these terms:

Shed Master''s Certificate C I certify that the package enquired for as noted below, are shown as landed but a thorough search has been made

for the packages and to the best of my belief they are not lying in this Section.

Then follow the details of the packages not traceable. The certificate is signed by the shedmaster. It is unnecessary for the purpose of this appeal to

dilate upon the nature of certificates ""A"" and ""B"", prescribed by the Rules framed by the Madras Port Trust. They relate to goods either not landed

or goods landed but not claimed within the period of free delivery. The nature of the duties performed by the Port Trust, as already pointed out by

us, is in their capacity as bailees. They act as agents of the steamer company for the purpose of giving delivery. Once they take charge of the

goods, it is their duty to warehouse the goods properly and give delivery to the consignee on demand. There was no question of the identity of the

consignee or the identity of the consignee or the identity of the goods being in doubt. The cause of action for damages for non-delivery of the

goods clearly arose, in our opinion, on the date when the ""C"" certificate was issued by the Port Trust declaring their inability to deliver the goods,

because the goods were not available. Any further attempt made by the Port Trust to locate the goods elsewhere would be no answer to the claim

for delivery made by the railway.

In this case also the first respondent called upon the appellant to issue ''B'' certificate which they did not do. What the appellant did was they

pointed out to some package which did not tally with the description of the cargo covered by the relevant import application and under Ex-A14,

the appellant informed the first respondent that the waste paper card board was the ""goods"" and if that was not cleared by the first respondent the

goods"" would be auctioned as per procedure in the absence of the issuance of certificate and this communication indicated to the first respondent,

the final rejection of their claim and therefore, the date of accrual of the cause of action for the suit. In the decision reported in Trustees of Port of

Madras v. Union of India Owning S. Rly. and 2 others, 1972 TLNJ 112. This Court had again to consider the fact of ''B'' certificate,

It would have been absolutely unfair to call upon a consignee to treat the ''B'' certificate as containing a false statement and to file a suit on that

basis and to compel him to pay cost to the Port Trust in the event of the ''B'' certificate being established to be correct.

In that case, the learned Judge held that the date of ''B'' certificate itself cannot be construed as the date of accrual of the cause of action since

the issuance of ''B'' certificate would mean that particular goods had short landed and the Trust believes it has not come into its custody. If the ''B''

certificate had been issued then it was the cause for non-delivery and in such an event he may institute a suit against both, so that he may get the

relief on the basis of the facts established.

In the instant case, the appellant did not issue these certificates which might have absolved them of their liability, which would mean short

landing. Neither did they issue a ''B'' certificate or a ''C'' certificate. It is also relevant to point out that the Traffic Manual referred to by the

respondent provides for the procedure if the enquiry form is time barred under para 3.30:

If the enquiry is registered after 7 days of the date of landing the enquiry form must be issued with the stamp ""time barred and the enquiry will be

made without prejudice.

It is not the case of the Port Trust that the enquiry form was lodged beyond time since this endorsement has not been made. It appears to me

that the first respondent has done all that he ought to do once he found that 83 bales out of the consignment covered by the import application

were not traceable. The appellant had taken a evasive step by pointing out some waste paper card board which is totally different from what was

imported by the first respondent and though the first respondent inspected the goods pointed out and informed the appellant that these were

different and requested them to issue the appropriate certificate the Port Trust did not do so and finally by the letter under Ex-A14 dated

10.3.1982, informed the first respondent that they should either take the loose waste card board as though that was their goods and clear the same

failing which the goods would be auctioned. They did not issue the appropriate certificates which they ought to have done. Once faced with the

reality that the goods were not going to be delivered to them, the first respondent issued the suit notice and filed the suit within six months from Ex-

A14. Therefore, the suit is within time and the Court below had also rightly come to the conclusion.

The appeal is dismissed with costs.