This second appeal by the New Jubilee Insurance Co Ltd calls into question the judgment and decree of an Additional District Judge, Karachi, in which he upheld the judgment and decree of a Civil Judge, Karachi, dismissing the suit of the appellant for damages and loss resulting from non-delivery of a part of consignment of raw cotton. The case of the appellant is that a consignment of 400 bales of Pakistani raw cotton was shipped from Karachi by Haji Ishaque Haji Dost Muhammad to Chittagong on the SS Ilyas Bakhsh belonging to the respondent carrier. The consignment was to be delivered to the East Pakistan Industrial Development Corp (EPIDC) and was insured with the appellant. On arrival, 15 bales were not delivered. EPIDC lodged a claim with the appellant for PKR 7,108.45, being the invoice value of the 15 bales of cotton short-delivered. The appellant settled this claim, paid up the amount and obtained a letter of subrogation from EPIDC. The appellant then instituted a claim against the respondent carrier and its local agent.

The respondents resisted the claim on the grounds that the bill of lading had been endorsed to MS Islam Choudhry & Co (the clearing agent of EPIDC), so the appellant had no right to sue; that some of the bales in the consignment in question were not permanently marked and this resulted in the obliteration of the marks, in consequence whereof a number of bales were landed under nil or wrong marks; that the full consignment of 400 bales of cotton was in fact landed at the Chittagong Port and hence the responsibility of the respondents came to an end as soon as the bales were free of the ship's tackle and entrusted to the Chittagong Port Authority; that it had not been established that the appellant or the original consignee suffered any loss; and that the suit was barred both under art 3.6 of the Rules under the Carriage of Goods by Sea Act 1925, as well as by limitation.

The trial Court held that the 15 bales, which were short-delivered to EPIDC, were landed by the respondent carrier at Chittagong Port under wrong nil marks, as they were not permanently marked; that since these bales of cotton had been landed at the port and entrusted to the Chittagong Port Authority, the respondents were not liable for the non-delivery; that the appellant had failed to adduce evidence as to the value of the contents of the bales in question and therefore had failed to prove any loss or damage to the consignee; and that, finally, the fact of the payment by the appellant to the original consignee had not been established. On these findings, the trial Court dismissed the suit of the appellant with costs.

On appeal, the first Appellate Court concurred in the finding of the trial Court that the appellants had failed to establish the value of the short-landed goods. It also held that the letter of subrogation executed by EPIDC in favour of the appellants was defective and incomplete, inasmuch as it did not mention the amount paid by the subrogee, and hence the letter could not be said to furnish a right to the appellant to file the suit. It accordingly dismissed the appeal of the appellant. It is against this decision that the appellant has come up in appeal before this Court.

Held: Appeal allowed.

So far as the value of the lost goods is concerned, there would appear to be no great difficulty. It is true that the value of the missing 15 bales of cotton has not been shown in the bill of lading, but the value can clearly be determined from the invoice. The treasurer of Haji Ishaque Haji Dost Muhammad, the firm which booked the consignment of cotton, has stated that the price of the 400 bales of cotton is shown in the invoice and is correct. The invoice shows the value of the full consignment, that is, 400 bales of cotton, as PKR 174,199.29. Since there is nothing to suggest that different bales of cotton contained different quality or quantity of cotton, or that the value of cotton in each bale was different, the value of the missing 15 bales of cotton would be worked out at PKR 7,108.45, which is the amount claimed by the appellant.

Counsel for the respondents then contended that both under the provisions of the Sea Carriage of Goods Act 1925 (the Act) and under the terms and conditions of the bill of lading the liability of the respondents was only in respect of the period between the loading of the goods into the ship up to the time when they were landed and ceased the moment the goods were discharged at the Chittagong Port. The Act incorporates and gives effect to the Rules and Convention adopted at the International Conference on Maritime Law held at Brussels in October 1922, and as further amended at the meeting held at that place in October 1923. Section 2 of the Act provides that the rules set out in the Schedule to the Act 'shall have effect in relation to and in connection with the carriage of goods by sea in ships carrying goods from any port in Pakistan to any other port whether in or outside Pakistan'. Article 1.e of the Rules set out in the Act defines 'carriage of goods' to cover only 'the period from the time when the goods are loaded on to the time when they are discharged from the ship'. Article 7 of the Rules states that nothing in the Rules shall prevent a carrier or a shipper from entering into an agreement, reservation or exemption 'as to the responsibility and liability of the carrier or the ship for the loss or damage to or in connection with the custody and care and handling of goods prior to the loading on and subsequent to the discharge from the ship on which the goods are carried by sea'.

Counsel for the respondents pointed to the following clause in the bill of lading: 'In all cases and in all circumstances the Company's liability shall absolutely cease when the goods are free of the ship's tackle and thereupon the goods shall be at the risk for all purposes and in every respect of the shipper or consignee'. Counsel contended that as soon as the goods were discharged from the respondent's ship at the Chittagong Port, the Chittagong Port Authority became the agent of the consignee and held the goods as bailee on its behalf. However, the case law predominantly establishes that the Port Authority acts as the statutory bailee of the shipping company, and not of the consignee.

The preponderant view in the authorities appears to be that the liability of a carrier for carriage of goods under the Act is for the period from the time when the goods are loaded on to the ship up to the time when they are discharged from the ship and that a provision in the bill of lading providing for the cesser of liability of the carrier in respect of goods carried in his ship as soon as the goods have been discharged from the ship or are free from the ship's tackle, is not inconsistent with or repugnant to the provisions of the Act or the Rules framed thereunder. This, however, does not materially help the respondents, because they have failed to establish, nor is there any material on record on the basis of which it could be held that they had landed the missing bales of cotton at Chittagong Port. The respondents have even failed to establish that 8,597 bales of cotton, which was the total amount of cotton carried by the ship, were discharged at Chittagong Port. Had they been able to establish this fact, it could have been presumed that the 15 bales of cotton which were short-delivered to EPIDC were among the bales which were discharged from the ship, but either due to the negligence of the Chittagong Port Authority or some other persons, these bales were not delivered to the consignees, and since the responsibility of the shipowner was only to land and discharge the cargo at the port of destination, which it had in fact done, the carrier was absolved from all further responsibility under the terms of the bill of lading. However, the respondents, having failed to discharge the burden of establishing that the missing bales of cotton were landed from the ship at the Chittagong Port, are clearly liable for the value of the bales, which has been satisfactorily proved to be PKR 7,108.45.