The respondent was the consignee of two packages containing electric firing units and capacitors consigned to an air force station in Bangalore. The consignment was shipped in apparent good order and condition by the High Commission of India in London from the Port of London to the Port of Madras on the SS Vishva Siddhi, owned by the appellant. The master issued a clean bill of lading. The vessel arrived at the Port of Madras on 17 September 1979. The consignment was found to be missing.

The respondent brought a suit against the appellant on 7 November 1984. The appellant argued that it was not maintainable as time-barred under art 3.6 of the Schedule to the Carriage of Goods by Sea Act 1925 (the Act). A Judge of the City Civil Court, Madras, found in favour of the respondent. The appellant appealed.

Held: Appeal allowed.

The Statement of Objects and Reasons appended to the Act provides as follows:

A Code of rules was drawn up in 1921 by the International Law Association at the Hague. These were subjected to criticism by the various interests affected till finally agreement was reached at the International Conferences on Maritime Law held in Brussels in October, 1922, and again in October, 1923. A Code of rules defining the responsibilities and liabilities to which a carrier of goods by sea should be subject and also the rights and immunities he was entitled to enjoy was drawn up, and it was unanimously recommended that every country should give legal sanction to these rules. The United Kingdom has done so by the Carriage of Goods by Sea Act (1924) (14 and 15 Geo. V.c.22). It is proposed to do the same in India by this Bill.

Relying on art 3.6 in the Schedule to the Act, counsel for the appellant argues that as the suit was not brought within one year after delivery of goods or the date when the goods should have been delivered, it is clearly barred by limitation. Article 3.6 was considered in a decision of the Supreme Court in East & West Steamship Co v SK Ramalingam (1960) 3 SCR 820, AIR 1960 SC 1058. After considering the preamble to the Act, their Lordships observed at [11]:

It is important to mention that apart from our own country, U.K., Australia, Canada, Ceylon, Newfoundland, New Zealand as well as Belgium, France and U.S.A. have given statutory effect wholly or partially to the Hague rules. This international character of the provisions of law as incorporated in the articles to the schedule to the Act makes it incumbent upon us to pay more than usual attention to the normal grammatical sense of the words and to guard ourselves against being influenced by similar words in other acts of our Legislature.

Coming to the effect of art 3.6, their Lordships further held at [25]:

The question we have to decide is whether in saying that the ship or the carrier will be 'discharged from liability', only the remedy of the shipper or the consignee was being barred or the right was also being terminated. It is useful to remember in this connection the international character of these rules, as has been already emphasised above. Rules of limitation are likely to vary from country to country. Provisions for extension of periods prescribed for limitation would similarly vary. We should be slow therefore to put on the word[s] 'discharged from liability' an interpretation which would produce results varying in different countries and thus keeping the position uncertain for both the shipper and the ship-owner. Quite apart from this consideration, however, we think that the ordinary grammatical sense of 'discharged from liability' does not connote 'free from the remedy as regards liability' but are more apt to mean a total extinction of the liability following upon an extinction of the right. We find it difficult to draw any reasonable distinction between the words 'absolved from liability' and 'discharged from liability' and think that these words 'discharged from liability' were intended to mean and do mean that the liability has totally disappeared and not only that the remedy as regards the liability has disappeared. We are unable to agree with the learned Judge of the Madras High Court that these words merely mean that 'even though the right may inhere in the person who is entitled to the benefits, still the liability in the opposite party is discharged by the impossibility of enforcement'. The distinction between the extinction of a right and the extinction of a remedy for the enforcement of that right, though fine, is of great importance. The Legislature could not but have been conscious of this distinction when using the words 'discharged from all liability' in an Article purporting to prescribe rights and immunities of the shipowners. The words are apt to express an intention of total extinction of the liability and should, specially in view of the international character of the legislation, be construed in that sense. It is hardly necessary to add that once the liability is extinguished under this clause, there is no scope of any acknowledgement of liability thereafter.

Regarding the starting point of limitation, namely the date when the goods should have been delivered, the following conclusion in [28] and [29] of the order is relevant:

But whether the delivery is to be made to the consignee or to anybody else on his behalf the duty of the ship's master is to start the delivery as soon as possible after the ship's arrival at the port and to complete it before the date of departure from the port. Before the ship had actually left the port it is not possible to say that the time when delivery should be made has expired. Once however the vessel has left the port it cannot but be common ground between the carrier and the consignee that the time when delivery should have been made is over. It is this point of time, viz., the time when the ship leaves the port, which in our opinion should be taken as the time when the delivery should have been made. The fact that after this point of time correspondence started between the carrier and the consignee as regards the failure to deliver and at a later point of time the carrier communicates his inability to deliver cannot affect this question. Nor can the ultimate repudiation of any claim that may be made by the shipper or the consignee affect the ascertainment of the date when the goods should have been delivered. The arrival at port of the vessel by which the goods have been contracted to be carried being known and the departure being equally an ascertainable thing and the duty of the carrier being necessarily to complete the delivery before leaving the port, the date by which the delivery should have been made is already a fixed point of time and later correspondence, claims or repudiation thereof can in no way change it.

We have therefore come to the conclusion that whatever be the proper mode of ascertaining the date when delivery 'ought to be made' under Art.31 of the Limitation Act whether that be the reasonable time for delivery in the circumstances of the case or the date when after correspondence the carrier intimates its inability to deliver or the date of the final repudiation of the claim on a claim for compensation having been made or in the case of part delivery the date when the bulk of the consignment was delivered the date when the goods should have been delivered for the purpose of the Third Clause of the 6th paragraph of Art.3 of the Act is the date when the ship by which the goods were contracted to be carried has left the port at which delivery was to be made.

A similar question under the same Act was considered by the Supreme Court in a later decision in AEI Lines Inc v J Lopez AIR 1972 SC 1405, wherein their Lordships applied the ratio laid down in East & West Steamship Co. The following conclusion in [7] is relevant:

From the passages quoted above, it is clear that th is Court had come to the conclusion that if by the time ship leaves the port, the goods shipped or any part thereof had not been delivered, it will be a case of non-delivery of the goods on the date when the goods should have been delivered. In that decision this Court has taken the view that the last date for filing the suit for 'loss or damage' is one year from the date the ship left the port. The cause of action for filing the suit for 'loss or damage' is one. Quite clearly, the claim in respect of short delivery is clearly barred by time. If we are to accept the contention of the plaintiff that his claim in respect of the damage caused to the goods delivered to him arose only on the date when the goods were delivered to him, then it means that the plaintiff had two causes of action under Clause (3) of paragraph 6, one relating to the loss and another relating to damage. From the language of the clause in question it is not possible to accept that contention. As observed by this Court in the decision referred to above the time when the ship leaves the port should be taken as the time when the delivery should have been made. Any delivery which has not been made by that date comes within the mischief of Clause (3) of Paragraph 6.

Counsel for the respondent has relied on Province of Madras v IS & C [1955] 2 MLJ 240, AIR 1955 Mad 519 and British India Steam Navigation Co Ltd v Shanmughavilas Cashew Industries (1990) 3 SCC 481 (CMI897), but the Court is satisfied that they are not helpful to the respondent's case. In as much as the vessel left the Port of Madras in 1979, and the suit having been filed only in 1984, the appellant's objection must be sustained. The suit is barred by limitation.