The plaintiff engaged the services of the first defendant to transport a cargo of incense sticks and herbal powder from Bangalore, India, to Felixstowe, UK, and to deliver it to the second defendant. The plaintiff and the first defendant agreed that the cargo would be delivered against payment. The cargo was delivered, but the second defendant failed to deposit or remit the money to the bank. The goods should have been delivered on surrender of the bill of lading. The defendants were jointly and severally liable for the payment of the value of the goods, namely INR 6,038,979, and interest.

The first defendant contended that it was only a carrier and had discharged its liability by delivering the cargo to the consignee named in the bill of lading. The suit was barred by limitation under the Carriage of Goods by Sea Act 1925 (the Act). The claim against the first defendant has been extinguished by virtue of art 3.6 of the Act.

Held: The second defendant shall pay the plaintiff the amount of INR 6,038,979 plus interest.

The first defendant relied on provisions of the Act. This Act deals with rules relating to bills of lading. The word 'carrier' is defined as follows:

Carrier includes the owner or the charterer who enters into contract of carriage with a shipper.

The Act also defines the contract of carriage. Article 1.b defines it. 'Contract of carriage' applies only to contracts of carriage covered by a bill of lading or similar document of title.

The bill of lading was not an 'order bill of lading'. Nothing on the record suggested that the goods should be delivered against payment. The plaintiff had not produced any tripartite agreement to the effect that both the first and second defendants were jointly and severally liable to pay the sale price. The first defendant's obligation was discharged once the goods were delivered in accordance with the carriage contract. There was no evidence that the cargo was not delivered to the second defendant.

The plaintiff had not established that there was an understanding between the plaintiff and the first defendant that the first defendant had to deliver the cargo to the second defendant on surrender of the original bill of lading. According to art 3.6 in the Sch to the Act, unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge before or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, or if, the loss or damage be not apparent, within three days, such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading.

Justice and equity demand that the person who received the goods pay the sale price. The cargo was supplied to the second defendant, and thus, the first defendant had discharged its obligation.

The first defendant did not seriously contest the issue of limitation. Except for pleading here and there in the written statement that the suit was barred by limitation, there was absolutely nothing on the record to substantiate this contention. The suit was one for recovery of money against the delivery of goods. The goods were delivered in 2007, and the suit was filed on 3 March 2010, within the period of 3 years. The suit was perfectly within the period of limitation.