The appellant is the owner of a fleet of vessels. A consignment of 16 packages was entrusted by the respondent to the appellant for carriage from Kobe, Japan, to Madras, India. On arrival, a part of the consignment was found to be damaged. The respondent filed a claim in the Madras High Court. The claim was limited to the damage to two cases. A single Judge of the Court held the appellant liable for payment of damages. The Judge also held that the Indian Carriage of Goods by Sea Act (the Indian Act) would apply, rather than the Japanese Carriage of Goods by Sea Act (the Japanese Act). The Division Bench affirmed. The appellant appealed to the Supreme Court on the issue of limited liability.

Held: Appeal partially allowed.

A bare perusal of s 2 of the Indian Act would clearly demonstrate that the same applies to the carriage of goods by sea in ships carrying goods from any port in India to any other port whether in or outside India which would mean that the Indian Act applies only when the carriage of goods by sea in ships takes place from a port situated within India and not a port outside India. The Japanese Act, on the other hand, applies in a situation where carriage of goods by a ship is either from a loading port or to a discharging port, either of which is located outside Japan. Therefore the Japanese Act will clearly be applicable in the instant case. As the originating port is outside India, s 2 of the Indian Act will have no application. The High Court misread the provision.

The approach of the High Court to quantum was also wrong. If the respondent confined its claim of damages only for two cases, there was no room for making the observation that the liability must be calculated taking into consideration the weight of 16 cases. The finding of the High Court is contrary to the statutory provisions. It has been argued that the value of the goods had been declared in the bill of lading. This is based on the premise that the bill of lading refers to the invoice. The invoice is not part of the bill of lading. The value of the goods is required to be stated on the bill of lading so as to enable the shipping concern to calculate the quantum of freight. It cannot, in the absence of any statutory provisions, be held to be incorporated therein by necessary implication or otherwise.

The liability of the appellant being limited in respect of the two cases, the matter should be considered afresh in the light of the observations made by the single Judge. To the aforementioned extent, the judgments and decrees of the High Court are set aside.