Nepal Food Corporation vs U.P.T. Import & Export Ltd. (Part) … on 10 April, 1987

JUDGMENT

Baboo Lall Jain, J.

1. This suit has been instituted by Nepal Food Corporation against U.P.T. Imports and Exports Ltd. (Part) and M/s. Shaw Wallace & Co. Ltd., for recovery
of a sum of Rs. 1,26,38,951.06P. On account of loss and/or damages suffered by them due to the alleged wrongful acts of the defendants and for interim and further interest thereon. U.P.T. Imports and Exports Ltd. (Part), are alleged to be the owners of motor vessel ‘Pichit Samut’ and M/s. Shaw Wallace & Co. Ltd., acted as the agents of the said owners in respect of the said M. V. ‘Pichit Samut’, for her visit during November/December, 1978 to the port of Calcutta for taking a load of a cargo of Nepal rice. The plaintiff loaded a total quantity of 4446.794 M.T. of Nepal rice valued at Rs. 1,05,459.22P. on Board the said vessel for carriage to the port of Penang, Malayasia. It so happened that after completion of the shipment on Dec. 4, 1978 the Mate’s receipts were duly issued and the ship left Calcutta Port. Though the Mate’s receipts mentioned that the goods were received subject to the conditions slated in the Bills of Lading which can be be obtained at the Agent’s Office, the plaintiff was not made over the bills of lading in exchange of the Mate’s receipts, to encash the letter of credit, in spite of demands. The plaintiff also could not fall back to the rice, loaded by the plaintiff, on board the said vessel. Even before the bills of lading were made over by Shaw Wallace & Co. Ltd. to the plaintiff’s forwarding agents at Calcutta, the cargo of rice had already been delivered at destination by the said vessel at Panang even without production of the bills of lading. The plaintiff was left with the bills of lading alone i.e. the papers only. It could neither encash the letter of credit, nor could it fall back to the goods. Extended date of the letter of credit expired even before the bills of lading were made over to the plaintiffs forwarding agent and the goods had also been discharged and delivered before the bills of lading were made over to the plaintiff.

2. So far as the defendant No. 1, being the owners of the said vessel are concerned, they have not appeared to defend the suit. Indeed, they could not possibly have any defence to this action. On or before 22nd Dec. 1978. i.e., by which time the goods were discharged and delivered, they must have had the knowledge, that the shipper had not been issued the bills of lading and they must have known that no one could have the

right to obtain delivery of the goods without being a holder of the bills of lading. In any event, the plaintiff as shipper and/or as rightful holder of the bills of lading which are document is of title to goods, was and is entitled to claim the goods and/or the value thereof from the owners of the said vessel, who parted with the said goods without authority of the holder of the said bills of lading. It is further significant that on the one hand the shipowner was no! exercising lien over the goods, nor was pressing for the realisation of its dues from the Charterer/Buyer whereas the paper bill of lading became so valuable a document that the shipper was not allowed to have possession thereof before the expiry of the term of the letter of credit.

3. On 25th January, 1979, a sudden change took place in the attitude of the defendants and all the three Bills of Lading were delivered to the plaintiff’s forwarding agents by M/s Shaw Wallace & Co. Ltd., the defendant 2 herein being Bills of Lading Nos. 1, 2 and 3 respectively all dated Dec. 4, 1978, in respect of a total cargo of 4,446.794 metric tons. None of the alleged conditions for issuance of the bills of lading which were raised namely for Bank Guarantee etc., earlier, underletters of Shaw Wallance, were pressed by Shaw Wallace or their principal the Ship owners. It is clear that by that time the entire damage was done, neither the Letter of Credit could be encashed, nor the goods were traceable. The plaintiff is, claiming a decree for the value of the said cargo and for interest thereon, as against the defendant 1. In addition the plaintiff is also claiming a decree against the defendant 2, the agent of the defendant 1 at Calcutta, inter, alia on the basis that it is due to the wrongful acts and/or negligence of the said defendant 2, that the plaintiff suffered the said loss and damages.

4. So far as the defendant 2 is concerned, the plaintiff claims that they were contractually as well as statutorily bound to issue and deliver Bills of Lading to the Plaintiff on demand against the delivery of the mate’s receipts. In any event, according to the plaintiff, the defendant 2 was guilty of having committed a tort of negligence in respect of the plaintiffs cargo and/or documents of title relating thereto and was also guilty of

conversion in respect of the said cargo and/or the documents of title relating thereto and as such the defendant 2, according to the plaintiff, is liable to pay and/or to compeasate the plaintiff for the value of the said cargo and/or the interest in respect thereof. The defendant 2 however, on the other hand, contends that it was merely an agent in respect of the said ship and as such was bound to act according to the instructions of its Principal who according to the defendant2, instructed it not to issue the Bills of Lading. The defendant 2 contends that the contract of carriage was between the plaintiff and the defendant 1 and the defendant 2 was merely the agent of the defendant 1 in respect of the particular trip to Calcutta, of the said vessel. The defendant 2 further contended that as agent they did not come within the category as mentioned in Section 230 of the Contract Act, i.e. where a contract is presumed to exist to the effect that the agent shall be personally bound by the contract. According to the learned counsel for the defendant 2 the breach of contract negligence or conversion if any, was by the defendant 1 and that the defendant 2 who was a mere agent of the defendant 1 had no personal obligations in the matter, and it merely carried out the directions of the defendant 1.

5. Under the circumstances and on the basis of the respective pleadings of the parties, the following issues were framed :–

ISSUES

1. Is the suit not maintainable as against the defendant No. 2 on the grounds as stated in the written statement?

2. Has there been any breach of contract on the part of the defendant No. 2?

3. Was there any negligence or breach of obligation on the part of the defendant No. 2, as alleged in paragraphs 15 and 16 of the plaint?

4. To what relief, if any is the plaintiff entitled as against the defendant No. 2?

6. I shall first deal with Issue No. 1. The learned counsel on behalf of the defendant 2 submitted that the contract of carriage was as between the plaintiff and the defendant 1 and since according to him, it was an admitted case that the defendant 2 acted as the agent

of the defendant 1 and since there was no contract to the effect that the defendant 2 shall be personally bound by the terms of the contract, the suit as against the defendant 2, so far as it is based on contractual rights is not maintainable.

7. However, the learned counsel on behalf of the defendant 2 could not give any plausible reasons as to why the suit could not be maintainable as against the defendant 2 so far as the tortious liability if any, of the defendant 2. as pleaded in the plaint is concerned The causes of action pleaded in the plaint are firstly on the basis of contract and secondly on the basis of liabilities arising out of the alleged tortious acts of the defendants. I am not satisfied that the suit as pleaded is not maintainable against defendant 2, even if the plaintiff succeeds in proving his case. The issue No. 1 is accordingly answered in the negative.

8. Before taking up the next two issues that is the issues No. 2 and 3, I shall first go through the facts of the case in somewhat greater details. On 7th Dec. 1977, the plaintiff entered into a contract with M/s. Ngoh Hong Hang (pte.) Ltd., of Singapore. The said contract is for a total quantity of 32,000 M.T. of three different qualities of Nepal rice. The prices are US dollars 212,216 and 225 respectively per M/T for respective different varieties of rice, as mentioned in the contract, free on board, stowed in vessel at berth, at Calcutta Port. The contract provided inter alia as follows : —

“Loading : Buyers shall intimate the Sellers at least 20 days in advance about the arrival, of the vessel’s name or its substitute. The placement of the vessel at berth at Calcutta Port will be arranged only on intimation of the Sellers, which shall be intimated to the Buyers 14 days in advance. When the buyers have placed the vesse at berth at Calcutta Port, the Seller shall place the rice on board vessel stowed at an average rate of 600 Metric Tons per working day, 24 consecutive hours commencing from the date of readiness of vessel to load at berth ( 600 M.Ts. per weather working day is based on vessel having 5 hatches). In case, vessel has less than 5 hatches, the loading rate will be calculated pro rata i.e. 120 M.T. per Hatch per day.

Buyers/carriers will have the option to carry out additional tallying of cargo simultaneously along with the Sellers’ tally whilst loading cargo.”

“In the event that loading is not completed within the above stipulated time, Sellers shall pay demurrage at the rate of U.S. dollar 1500 (Fifteen Hundred) per day for every additional day taken for loading. In case of the loading being completed in advance of the above stipulated time, the Sellers shall be entitled to despatch bonus at the rate of US doller 750 (Seven Hundred Fifty) per day.'”

“In the event that vessel is not placed at berth at Calcutta Port in the stipulated time Seller’s wharfage, demurrage and all other expenses incurred to the cargo at the Port shall be shared 70% (Seventy Per cent) by the Sellers and 30% (Thirty per cent) by the buyers.”

“Freight : Any freight involved in moving the rice up to Calcutta Port will be to the Sellers’ account. Freight from Calcutta onwards will be to the Buyers’ account.”

“Payment : The Buyer shall establish an irrevocable confirmed and transferable Letter of Credit confirmed by the Rastriya Banijya Bank, Kathmandu, in US dollars in favour of the Sellers allowing part shipment. On presentation ‘On Board Billls) of Lading (Charter Party Bill of Lading is also acceptable) supported by the Sellers’ Commercial Invoices 100% invoice value shall be paid at sight at the Sellers’ Bank and/or its Branches. Initially Letter of Credit as indicated above will be established for 10,000 Mts. of rice within first week of January, 1978 and Letter of Credit for the remaining quantity will be established at least 30 days in advance for every shipment. Buyers will furnish performance Bank guarantee for 3% (Three per cent) of the total contracted value within 15 (Fifteen) days of the signing of this Contract. All Bank charges, commission, interest incurred in connection with the Letter of Credit and performance bond will be borne by the Buyers. In case the performance Bank guarantee is not furnished to the Sellers’ Bank by the Buyers within the above mentioned period, the Sellers will have an option of extending the period, or cancelling the Contract, on the verification that guarantee

is not established within the stipulated period.”

9. It appears that a Charter Party
agreement was entered into as between the Shipowner the defendant 1 and the purchaser on 11th Oct. 1978. Under the said Charter Party agreement the said purchaser Ngoh Hong Hang (pte) Ltd took the said vessel ‘Pichit Samut’ on Charter, for carrying 5000 M.Ts. of bagged rice from Calcutta to Penang. Some of the relevant terms of the said Charter party are set out hereunder : —

“Lien Clause : Owners shall have a lien on the cargo for freight, dead-freight, demurrage and damages for detention. Charteres shall, remain responsible for dead-freight and demurrage (including damages for detention), incurred at port of loading. Charterers shall also remain responsible for freight and demurrage (including damages for detention) incurred at port of discharge, but only to such extent as the owners have been unable to obtain payment thereof by exercising lien on the cargo.”

“Loading : Cargo to be loaded and stowed free of expenses to the vessel at the rate of 600 M.T. basing 5 hatches, per weather working day, Sundays/Holidays excluded.”

“Demurrage/Despatch : US 1200/600 dollars per day or prorata applicable for loadport, Demurrage/despatch to be settled in Singapore within 30 days after vessel completed discharge.”

“Holds should be free from smells and insects and to be cleaned at Owner’s expenses if required to do so. At loadport, Notice of Readiness to be tendered and accepted after. vessel passed holds survey. Laytime for loading shall commence at 1 p.m. If Notice of Readiness is given before noon and at 8 a.m. next working day if notice given during office hours after noon. Notice at loading port to be given to the shippers through their Forwarding Agent.”

“The Master will authorise Charterers or their agents to sign Bill/s of Lading on his behalf provided they are in conformity with the terms of the charter party.”

10. There is nothing on record that the terms of the said charter-party agreement were made known to the plaintiff until after this suit was instituted.

11. On 16th Oct. 1978 Grand Fortune (Singapore) Pvt. Ltd. wrote a letter to the defendant 2 confirming the telex despatched by them to the latter. It was further written
therein as follows : —

“In accordance with the Charterer’s request to assign the vessel under your agency for this fixture, we, on behalf of the owner’s wish to confirm your appointment to act as owners’ protective Agents for which an agency fee of US dollars 350 will be paid to you.”

“Notice of Readiness to be tendered and accepted after vessel passed holds survey. Laytime for loading shall commence at 1 p.m. if notice of readiness is given before noon and at 8 a.m. next working day if Notice given during office hour afternoon.”

12. There is nothing on record that the contents of this letter were communicated to the plaintiff at any time prior to the institution of this suit. On 8th Nov. 1978. a Notice of Readiness was tendered by the defendant 2 to Asian Agency. According to the Forwarding Agent of the plaintiff the said Notice of readiness was accepted by the said Forwarding Agent on 28th Nov. 1978. The loading of the cargo commenced immediately thereafter. On 30th Nov. 1978 a telex appears to have been received by the defendant 2 from M/s. Grand Fortune (Singapore) Pvt. Ltd. The said telex refers to an earlier telex from Shaw Wallace which has not been disclosed nor tendered in evidence in this suit. The said telex date 3oth Nov. 1978 contains inter alia a message to the following effect : —

“We repeat to say that it was due to shipper’s failure to move sufficient cargo to loading berth warehouse and Port Authority will only allocate berth after sufficient cargo about 2,000 tons are available in export shed as per your advice. However, we feel the shipper’s attitude unethical and taking advantage on Charterers/Buyers. However, we will discuss with Charterers and advise you the outcome.”

On 4th Dec. 1978, the said vessel, after the loading was completed, sailed from the port of Calcutta. Before the said vessel left the port of Calcutta, the Chief Officer of the said vessel signed a large number of mate’s receipts

covering the entire quantities loaded. The said mate’s receipts were issued in the printed form of M/s. Shaw Wallace & Co. Ltd the defendant 2. Each of the said mate’s receipts mention as follows : —

Received from the Commissioners for the port of Calcutta on board the steamer, Pichit Samut, for L.P.N. Malaysea on account of Asian Agency subject to the conditions stated in the bills of lading which can be obtained at the agent’s office.

On 5th Dec, 1978, the defendant 2, as stated on behalf of the defendant 2, received a telex message from Grand Fortune (Singapore) Pvt. Ltd., requesting the defendant 2 not to issue bill of lading in view of shipper’s/Charterer’s dispute on lay days. The contents of this telex, were also not communicated to the shipper at the relevant time.

13. On 12-12-1978 the defendant No. 2 states that it received another telex message from Grand Fortune, the owner’s agent, quoting the telex message received by them from the charterer and requesting the defendant 2 to obtain Bank Guarantee in exchange of the Bills of Lading. The contents of this telex were also not communicated by Shaw Wallace to the plaintiff or its agent. On 13-12-1978 a Statement of facts was issued by the defendant 2. On 17-12-1978 the blank Bills of Lading duly filled in along with the mate’s receipts were submitted by Asian Agency to the defendant 2 for signature and return. On 18-12-1978 the ship arrived at the Port of Penang and commenced discharge of Cargo, even without production of the Bills of Lading, On 19-12-1978 Asian Agency returned the Statement of facts with their comments with regard to the points not acceptable to them. On 27-12-1978 the discharge of cargo at port of Penang was completed. On 28-12-1978 the defendant 2 wrote a letter to Asian Agency, intimating that lay time will be counted on the basis of date when the vessel arrived in the port on 9-11-1978. On 1-1-979 a telex message was sent by Asian Agency to the defendant 2, requesting the release of the Bills of Lading. The defendant 2 was further intimated that the plaintiff would not be able to negotiate the Letter of Credit, if there was a further delay in issuing the Bills of Lading and the

defendant 2 will be liable for the consequence. In this telex message the name of Dutta is specifically referred. A controversy was sought to be raised by Shaw Wallace that they had no employee having any title Dutta. I am not inclined to believe that case. In the said cable which is an admitted document, the name of Dutt is specifically referred and in their reply, Shaw Wallace did not raise any such controversy. This telex contains red and black types. Puri had stated in his evidence that the cross messages coming from either sides are recorded in the telex. The black type seems to me to be the message from Shaw Wallace to Asian Agency, requesting them to come to phone and talk to Mr. Dutta. In any event, Shaw Wallace, in their reply telegram never raised any controversy of non-existence of Mr. Dutta, in their company, even if the said message was a message from Asian Agency.

14. On 3-l-79 a telex message was received by the defendant 2 from the charterer who is also the purchaser, requesting Shaw Wallace not to issue the Bills of Lading, without telex confirmation from them prior to releasing Bills of Lading even though they (i.e. shipper) have consented to the necessary Bank Guarantee. In the said telex they further write to Shaw Wallace & Co. inter alia as follows :

“Kindly act as agent on our behalf to do
needful as possible and we will be responsible for all proceedings and legal actions”.

15. On proper analysis, this document seems to me to have been asked for by Shaw Wallace, to cover themselves against any possible claim of Nepal Food Corporation. This is so because Shaw Wallace were already acting as agents of Ngoh Hong Hang in respect of Eastern Grand and other matters. So far as Pichit Samut is concerned, though the appointment of Shaw Wallace as shipowner’s agent, was procured by Ngoh Hong Hang as their agent, yet there was no indemnity of Ngoh Hong Hang, nor any writing of Ngoh Hong Hang in possession of Shaw Wallace. In my opinion oral talks were already taking place between Puri and Mr. Hang, who was camping in Calcutta at least on or about 12-12-78. It must be pursuant to Mr. Hang’s request that the contents of cables of 5th and 12th December were not communicated to

Nepal Food Shaw Wallace wanted messages from Shipowner to withhold the bills of lading as orally requested by Hang and Hang managed such teleprinter messages, may be that he himself was the sender. After the T. P. Message of 1st January, 1979 from Asian Agency, Shaw Wallace wanted further insurance from Hang Hong and Hong Hang sent the teleprinter message. Mr. Puri ultimately accepted that this appointment by Ngoh Hong hang was accepted by Shaw Wallace. 16. On 3-1-1979 the defendant 2 sent a telegraph to the forwarding agent of the plaintiff M/s. Asian Agency, inter alia, intimating that the owner’s want furnishing of Bank Guarantee towards the payment of demurrage before the release of the Bills of Lading but in that telegram the amount of the guarantee required was not specified. Existence of Dutta was also not disputed in the said telegram. They also required a guarantee in favour of the owner so that they will release the Bills of Lading upon receipt of owner’s instructions.

17. On 15-1-1979 the period of Letter of
Credit expired On 15-1-1979 a letter had
been written by the defendant 2 to Asian
Agency intimating inter alia that the
demurrage of 30,000 dollars was payable
regarding the vessel ‘Pichit Smut’. Mr. Puri in
his evidence admitted that this letter was
written on behalf of their Principal which
included Ngoh Hong Hang the charterer
purchaser.

18. On 19-1-1979 Asian Agency caused a letter to be sent through M/s. Dutt and Sen Advocate, inter alia stating that Bills of Lading had not been issued to them. By the said letter M/s. Dutt and Sen, inter alia, intimated the defendant 2, that the action in withholding the Bills of Lading was illegal and against all principles of shipping practice and that they were not entitled to withhold the Bills of Lading for any alleged claim as against the plaintiff. Thereafter, on 25th January, 1979 the three bill of lading which form part of Ex. E were made over to the plaintiff. However, by that time the period of negotiation of the documents and/or of the encashment of the Letter of Credit had already expired and furthermore, the cargo covered

by the said bills of lading had also been discharged by the said ship and delivered by the defendant 1 at destination. It was therefore not possible for the plaintiff, either to encash the said Letter of Credit or to obtain delivery of the goods covered by the said bills of lading.

19. Under the circumstances, the instant suit was instituted by the plaintiff on 3rd December, 1979.

20. In view of the facts, as aforesaid, I shall now deal with Issue 3 and thereafter I shall come back to Issue No. 2. The first question is whether there was any negligence or breach of obligation on the part of the defendant 2 as alleged in paragraphs 15 and 16 of the plaint. Mr. Gautam Chakraborty, learned counsel appearing on behalf of the defendant 2, relied on a passage in Winfield and Fotowiez on Tort, 11th Edition, at page 66 which reads as follows : —

“Negligence as a tort is a breach of a legal duty to take care which results in damage, undesired by the defendant to the plaintiff.”

Mr. Chakraborty contended that there should be a legal duty on the part of defendant 2 towards the plaintiff and there should be a breach of that duty also and there should be consequential damage to the plaintiff in order to prove that the sort of negligence was committed by the defendant 2 as against the plaintiff. According to Mr. Chakraborty, his client was an agent of the defendant 1 and his duty was only to the defendant 1, His client had no contractual obligation to the plaintiff and since there was no duty, there was no question of any breach of that duty or any consequential damage arising therefrom. According to Mr. Chakraborty, an agent is bound to conduct the business of the principal according to the directions given by the principal Mr. Chakraborty further relied on a passage in Halsbury’s Laws of England, 4th Edn. Vol. 43 paras 534 and 535. According to him the terms of the Charter Party could be incorporated in the Bill of Lading by express reference, in which case they became the terms of the contract contained in the Bills of Lading capable of being enforced by or against the (sic), consignee or indorsee as the case (sic) be. Mr. Chakraborty relied on Porteus v. Watney, (1878) 3 QBD 534 at p. 541

in support of the proposition the the terms of the Charter Party became the terms of the contract contained in the Bill of Lading Mr. Chakraborty also relied on the judgment in the ease of Alimenta S. A. v. National Agricultural Co-operative Marketing Federation of India Ltd. in support of the proposition that by reference an arbitration clause contained in the earlier contract can be incorporated into a letter of Contract. The defendant 2 also relied on the case reported in (1900) 2 All ER 578 (Sociedad Finciera De Bienes Raices S.A. v. Agrimpex Hungarian Trading Company for Agricultural Products). In that case a Charterer was to load certain cargo of maize at an Argentine Port. The Charterer having paid demurrage charges under protest to the ship owners recovered in an action against them, the demurrage and also despatch money on the ground that the vessel was not ‘arrived ship’ at Buenos Aires during the period for which demurrage was claimed and realised by withholding the delivery of the bills of lading. The House of Lords however, did not express any opinion whether that act of realisation of demurrage by withholding the Bill of Lading was a rightful action or not, nor was the same in issue. In that case the House of Lords dealt with the respective claims of the Charterer and the shipowner. Furthermore the charterer himself was the Shipper and that also makes a lot of difference depending on the terms of charter party.

21. In the aforesaid judgment, Lord Justice Cohen, at page 591, referred to the fact that the respondent’s claim refund of demurrage which they paid to the appellants under protest in order to obtain the bill of lading for the cargo put on board the said ship. The aforesaid case is not an authority for the proposition as to whether a ship owner can rightfully withhold the issuance of the bill of lading for realisation of its claim. Furthermore, in the said case the charterer himself happened to be the shipper. In this case however, the shipment was made by the third party and the charter party provided that such claim for demurrage were to be settled at Penang within one month after the goods were discharged at the port of destination. In any event, the House of Lords in the said case did not decide as to when and

under what circumstances and if at all a ship owner can rightfully withhold the bill of lading.

22. Mr. Bachawat learned counsel appearing on behalf of the plaintiff contended that an agent has twofold duties. One is, to his principal and the other is to represent the principal in dealings with third persons. According to Mr. Bachawat in so far as agents dealing with the third party is concerned if he acts unlawfully, then he is liable to the third parties in tort. Mr. Bachawat relied on some of the provisions under the Indian Carriage of Goods by Sea Act, 1925, Section 2 of the said Act provides that subject to the provisions of the said Act the Rules set out in the schedule shall have effect, in relation to and in connection with the carriage of goods by sea in ships carrying goods from any port of India to any other Port whether in or outside India. The said Rules are contained in the schedule under the said Act. Article 3 Sub-rule 3 reads as hereunder -.-

“After receiving the goods into his charge, the carrier or the master or agent of the carrier, shall, on demand of the shipper, issue to the shipper a Bill of Lading showing among other things.

(a) The leading marks necessary for identification of the goods as the same are furnished in writing by the shipper before the loading of such goods starts, provided such marks are stamped or otherwise shown clearly upon the goods if uncovered, or on the cases or coverings in which such goods are contained, in such a manner it should ordinarily remain legible until the end of the voyage.

(b) Either the number of packages or pieces, or the quantity, or weight, as the case may be as furnished in writing by the shipper;

(c) The apparent order and condition of the goods :

Provided that no carrier, master or agent of the carrier, shall be bound to state or show in the bill of lading any marks, number, quantity, or weight which he has reasonable ground for suspecting not accurately to represent the goods actually received, or which he has had no reasonable means of checking.”

23. Relying on the said Rule Mr. Bachawat contended that there is a statutory duty cast upon the carrier or the master or agent of the carrier to issue to the shipper a bill of lading after receiving the goods. In answer to this Mr. Chakraborty relied on Article 5 which provides as hereunder :

“A carrier shall be at liberty to surrender in whole or in part all or any of his rights and immunities or to increase any of his responsibilities and liabilities under the Rules contained in any of these articles, provided such surrender or increase shall be embodied in the bill of lading issued to the shipper”.

“The provisions of these Rules shall not be applicable to Charter parties, but if bills of lading are issued in the case of a ship under a charter party, they shall comply with the terms of these Rules. Nothing in these Rules shall be held to prevent the insertion in a bill of lading of any lawful provision regarding general average.”

24. According to Mr. Chakraborty the ship was under the Charter party and therefore, the Rules contained in Article 3 did not apply, but Article 5 itself says that when a bill of lading is to be issued in case of a ship under charter party, they shall comply with the terms of these rules. In the instant case bills of lading were to be issued. May be that the concerned ship was under a charter party yet the shipper was a third party and it is a common case that the bills of lading were in fact issued, and/or were to be issued. The word they shall comply in my opinion refers to the ship owner or the master or the shipowners agents and they are bound to comply with the said rules. I am unable to accept the submission of Mr. Chakraborty, that the word ‘they’, refers to ‘Bill of Lading’. Bill of Lading is not a person who can comply with any rules.

25. In Halsbury’s Laws of England, Volume 43 (4th edition) in para 787 it has been stated as follows : —

“However, a servant or agent of the carrier is not entitled to avail himself of the defence and limits of liabilities, if it is proved that the damage resulted from an act of omission of the servant or agent, done with intention to

cause damage or recklessly and with knowledge that damage would probably
result.”

26. In the same volume of Halsbury para 769 reads as follows : —

“After receiving the goods into his charge the carrier, or the master or agent of the carrier, must on demand of the shipper, issue to him a bill of lading showing : —

(1) the leading marks necessary for identification of the goods, as furnished in writing by the shipper, before the loading of the goods starts, provided such marks are stamped or otherwise shown clearly on the goods if uncovered, or on the cases or coverings in which the goods are contained, in such a manner as should originally remain legible until the end of the voyage :

(2) either the number of packages or pieces, or the quantity or weight as the case may be, as furnished in writing by the shipper;

(3) the apparent order and condition of the goods. No carrier, or master or agent of the carrier, is bound, however, to state or show in the bill of lading any marks, number, quantity or weight which he has reasonable ground for suspecting not accurately reasonable means of checking.”

27. It was argued by Mr. Bachawat that a Bill of Lading has been given and its provisions must be considered to relate back and applied to what has been done in regard to shipment before it was given. It has to be taken as the expression of the contract until everything has been done.

28. In Halsbury’s Laws of England Volume 45 (4th edition) para 1288 at page 593, it is stated as follows : —

“The duty imposed by a statute is in many cases absolute, that is to say, all that is necessary to prove a breach of the duty, is to show that the requirements of the statute have not in fact been complied with, and it is not necessary for the plaintiff in an action for breach of duty to show how the failure to comply arose or that the defendant was guilty of any failure to take reasonable care to comply; nor is it normally a defence for the defendant to show that he took all reasonable precautions to secure compliance.”

29. In the instant case, before me the delivery of the goods on board the ship was completed on 4th December, 1978. On 17th December, 1978 the forwarding agent presented the mate’s receipt along with the filled in forms of bills of lading, to the defendant 2 and demanded the signed bills of lading. The defendant 2 did not in spite of the said demand issue the bills of lading. There is no doubt in my mind that demands for supply of Blank Bills of Lading must have been made immediately after the mate’s receipts came in possession of the forwarding agents and the delay in making over blank bills of lading must have been caused by Shaw Wallace. Therefore, a further demand in writing was made by telex message dated 1st January, 1979. The defendant 2 replied that the owner wants Bank Guarantee towards payment of demurrage before the, release of bills of lading (Exhibit No. 2) Therefore, the Bills of Lading were not issued in spite of the demands and on 15th January, 1979 the letter of credit ceased to be operative. Mr. Bachawat argued that there was a statutory duty cast upon the defendant 2, as agent, to issue bills of lading, on demand and this, the defendant 2 failed to carry out. Therefore, there was a breach of statutory duly by the defendant 2. I agree with this contention on behalf of the plaintiff and I hold that the act of withholding of bills of lading was wrongful and in violation of the statutory duty of the defendant 2.

30. Article 5 of the schedule to the Carriage of Goods by Sea Acts, does not, in my opinion make article No. 3 inapplicable. Article 3 applies when the bill of lading is intended to be issued even if the ship was under a charter party. In this case the bill of lading was intended to be issued and hence Article 3 of the said schedule applied.

31. Let us now test the argument on behalf of the defendant No. 2 that it was merely an agent and that it was merely acting under the instructions of its principals the shipowners, in withholding the bills of lading and as such Shaw Wallace & Co. was not liable for the consequences of their acts.

32. The contention of Mr. Chakraborty was that his client was acting under instructions of his principals that is

defendant 1, shipowner. The defendant 1 by its telex message directed defendant 2, not to issue the Bill of lading.

33. The contention of Mr. Bachawatwas that the agent is liable for his wrongful acts even if there is an express authority. For this, he relied on the passage in Halsbury’s Volume 1 (4th edition) para 846 which reads as follows : —

“Where a principal gives his agent express authority to do a particular act which is wrongful, or which necessarily results in a wrongful act, the principal is responsible, jointly and severally with the agent, to third persons for any loss or damages occasioned thereby.”

34. In Bowstead on Agency (15th edition) it is stated as follows :

“Vicarious liability in the law of tort seems also to have a different basis from agency in contract. In contract the agent is not normally liable, and the effect of agency rules is in the majority of cases to establish the primary liability of the person with whom the third party intended to deal. But in tort the actual tort-feasor is in principal liable, and the effect of vicarious liability is to add a defendant, often unknown to and uncontemplated by the victim; on one view its purpose is simply to find a defendant who can pay”. In the same volume at page 490, it is commented as follows :– “It is in general no defence to an action against a tort-feasor for the tort-feasor to prove that he acted under the authority, instructions or orders of another. In this respect tort liability differs from contract liability. But of course, where such authority, instructions or orders make legal what might otherwise be tortious, there will be no liability, and ratification also may make non-tortious what was tortious when it was done.”

35. In Charlesworth on Negligence (5th edition) at page 891 the law of Joint Tort-feasors is stated to be as follows : —

“Wrongdoers are deemed to be joint tort-feasors within the meaning of the rule where the cause of action against each of them is the same, namely that the same evidence would support an action against them, individually. As Sargant L. J. expressed it.

“There must be a concurrence in the act or acts causing damage not merely a coincidence of separate acts which by their conjoined effect cause damage”. Accordingly they will be jointly liable for a tort which they both commit or for which they are responsible because the law imputes the commission of the same wrongful act to two or more persons at the same time. This occurs in cases of (a) agency, (b) vicarious liability and (c) where a tort is committed in the course of a joint act whilst pursuing a common purpose agreed between them.”

36. In this case after the cargo was shipped on board, the shipowner had a lien on the
cargo for the realisation of its dues if any as per the Charter Party. Furthermore, Clause 27 of the Charter Party agreement provided as
follows : —

“Demurrage/despatch to be settled in Singapore, within 30 days after the vessel completed discharge” Lay time under the contract between the plaintiff as seller and the buyer M/s. Ngoh Hong Hang (Pvt.) Ltd. provided as follows : ”Buyers shall intimate Sellers at least 20 days in advance about the arrival of the vessel’s name or its substitute. The placement of the vessel at berth at Calcutta Port will be arranged only on intimation to the buyers 14 days in advance, When the buyers have placed the vessel at berth at Calcutta Port, the sellers shall place the rice on board vessel, stowed at an average rate of 600 m.ts. per weather working day, 24 consecutive hours, commencing from the date of readiness of vessel, to load at berth (600 Mts. per weather working day is based on vessel having 5 hatches). In case vessel has less than 5 hatches the loading rate will be calculated pro rata i.e. 120 Mts. per hatches per day. Buyers/Carriers will have the option to carry out additional tallying of cargo simultaneously along with the sellers tally whilst loading cargo.”

“In the event loading is not completed within the above stipulated time, Sellers shall pay demurrage at the rate of US Dollar 1500 (fifteen hundred) per day for every additional day taken for loading. In case of the loading being completed in advance of the above stipulated time, the sellers shall be entitled to despatch bonus at the rate of US Dollar 750 (seven hundred fifty) per day.”

“In the event that vessel is not placed at berth at Calcutta Port in the stipulated time Sellers wharfage, demurrage and all other expenses incurred to this cargo at the Port shall be shared 70% by the Sellers and 30% by the Buyers”.

37. So far as the Charter party is concerned, that was an agreement between the purchaser and the shipowner. Whatever claims that arise between the shipowner and the charterer, they were binding on the charterer and in any event the shipowner had a lien on he cargo in terms of the charter party, Whatever claims or dues that had or could arise in terms of said charier party agreement were between the shipowner (defendant 1) and the said charterer who also happens to be the buyer in this case. Furthermore, in terms of the charter party agreement the demurrage was to be settled at Singapore, 30 days after discharge of the goods, there was no obligation of the plaintiff, to the shipowner to pay the demurrage at Calcutta before issuing of the Bill of Lading. The shipowner had no right to demand the payment of demurrage if any from the shipper even in terms of the charter party. The witness on behalf of the defendant 2, could not explain as to how such demand could be made from the shipper and furthermore how a demand of bank guarantee can be made from the shipper. When the witnesses on behalf of the defendant 2 were asked as to how the shipowner will be put in a better position by the withholding of the issuance of the bill of lading or by obtaining the bank guarantee from the shipowner, specially when they had a lien on the goods which were far more valuable than the alleged claims for demurrage, they could not explain the same satisfactorily.

38. So far as the shipowner is concerned, he had the right to realise his dues if any, including demurrage if any incurred at the loading port, from the charterer in terms of the charter party. The shipwoner i.e. the defendant 1 was absolutely safe and it could exercise its rights of lien, against the goods if necessary. Whether the demurrage is paid by the charterer or whether the same were realised from the goods, was of no particular significance, so far as the shipowner is

concerned, and the demand from the shipper of any alleged demurrage, after the cargo was loaded by the shipper and after clean mate’s receipts were issued and after the ship was allowed to leave the port on having issued such clean mate’s receipts, was in my opinion mala fide and was made with ulterior objectives.

39. The insistence for any bank guarantee from the shipper towards demurrage charges before making over the bills of lading was mala fide and wrongful. The act of withholding of the bills of lading was in violation of the plaintiff’s rights to have immediate possession of its documents of title to goods shipped and the same was and could only be in the interest of Ngoh Hong Hang Ltd., who also made a request to the defendant 2 as per document produced by defendant 2. The entire acts and conduct of Shaw Wallace was actuated with mala fide objectives against the plaintiff and with intent to help its principals, the said M/s. Ngoh Hong Hang (Pvt.) Ltd. They never disclosed to the plaintiff that the right to issue the Bill of Lading was vested in Charterer/Purchaser and themselves as agent of the Charterers. They have not disclosed the messages they sent to the shipowner prior to shipowner’s message of 30th November 1978. They did not even communicate to the plaintiff the alleged teleprinter message dated 5th December, 1978 (Ext. 7), alleged to have been received by them from the shipowner, though it very much concerned the shipper. It is to he noted that after Eastern Grand was loaded by the plaintiff and after that ship left on 30-12-78, Shaw Wallace had no hesitation in communicating the alleged messages of shipowner, in respect of both the ships on or about 3-l-79, It is now quite clear that Shaw Wallace were to get another ship loaded between 6-12-78 to 29-12-78 and any communication of the message on 5-12-78, could cause, stoppage of the said next shipment which would have caused failure of the plan of Ngoh Hong Hang, their principals. The authority and power given to Shaw Wallace and/or taken up on by them by the Mate’s report, was in my opinion irrevocable without consent of the shipper. They kept quiet until the goods were discharged and made over to their principal Ngoh Hong Hang or to their order. They did not communicate to the

plaintiff the contents of the alleged Teleprinter message dated 12-12-78 (Ext. 9). The first communication to the forwarding agent was dated 3rd January 1979, which again does not specify the amount of claim or bank guarantee and is incapable of compliance. If the Teleprinter message of 5th December would have been communicated, the loading of the other vessel might not have taken place or might have been obstructed Ngoh Hong Hang were very anxious to get as much quantity on both the ships as possible. The T. P. Message of 5-12-78 also shows anxiety to get more cargo on ‘Pichit Samut’. The loading of Eastern Grand commenced on 6-12-78 and was completed on 29-12-78. Any communication to Nepal Food to the effect that they will not issue bills of lading in respect of Pichit Samut or that they had instructions to that effect, before the commencement and/or completion of loading on ‘Eastern Grand’ or before ‘Eastern Grand’ left, could easily defeat the objectives of Ngoh Hong Hang. The documents tendered in Suit No. 1010 of 1979, on behalf of Shaw Wallace, establish the aforesaid facts. Furthermore Mr. Hang of Ngoh Hong Hang was camping in Calcutta on 12-12-78 and instructed both the Master of Eastern Grand and Shaw Wallace to take more cargo on Eastern Grand and even decided to keep the ship waiting till 28-12-78, in the hope of getting more cargo. Mr. Puri had written a letter to Nepal Food Corpn. in respect of Eastern Grand dated 12-12-78, conveying the decision of his principal Mr. Hang of Ngoh Hong Hang, to take more and more cargo and to detain the ship. But Mr. Puri, did not care to communicate the messages of 5th December 198 and 12th December, 1978. AH this shows how Nepal Food Corporation was being trapped with the active assistance and co-operation of Shaw Wallace and/or its officer. It is quite probable that the messages dated 5th December 1978 and 12th December 1978 originated from Ngoh Hong Hang and were meant only for record purposes of Shaw Wallace with instructions not to divulge it till ‘Eastern Grand’ was loaded and it left. It was only after Eastern Grand was loaded and left Indian Waters on 30-12-78 that Shaw Wallace wrote to Asian Agency about the alleged instructions of the principals, in respect of both the ships.

It was thereafter on 15th January 1979 when the letter of Credit ceased to be operative that they for the first time specified the amount of Bank Guarantee and that also without particulars. By that time the entire object of their principals Ngoh Hong Hang had been achieved. That the alleged claim raised by them was false is also proved from the fact that they ultimately on 25th January 1979, made over the bills of lading without insisting for the alleged claims, probably to make a show is ignorance or to save themselves from the threatened action. The Bills of Lading regarding ‘Eastern Grand’ were made over on 28th January 1979,

40. All the aforesaid facts establish that Shaw Wallace and/or its officers concerned were wilfully and deliberately acting in close conjunction with Ngoh Hong Hang (Pvt.) Ltd. and they did not care to discharge their obligations to the plaintiffs. Furthermore the two exhibits 7 and 9 dated 5-12-78 and 12-12-78 are mere copies of alleged teleprinter messages alleged to have been received from Grand Fortune. They do not bear any signatures, nor are they the original messages. Such a message could originate from any source and even Nogh Hong Hang could cause such messages to be sent. The sender of the message has not been called and the person receiving the message if any has also not been called. What happened to the original is also not explained. Even if the shipowner sent the message, the legal position is hardly altered The documents tendered in evidence also show substantial payments to Shaw Wallace by Ngoh Hong Hang. The communications sent by Shaw Wallace to the shipowner or to Nogh Hond Hang or the instructions if any prior to issue of letter dated 15th January 1979, have been kept away from the court. Why Ngoh Hong Hang made payments to Shaw Wallace has also not come to light.

41. The question arises as to why should the shipowner or Shaw Wallace & Co. act to protect the alleged interest of Ngoh Hong Hang (Pvt.) Ltd. This is partly explained by various documents and oral evidence that have been tendered in this suit. The contents of the charter party agreement, were not in the knowledge of the plaintiff until they were disclosed at or about the trial of this suit.

42. The Charter party agreement dated 11-10-78 in Clause 39, inter alia, provided as follows : —

“Master will authorise charterer or their agents to sign the bills of lading on his behalf provided they are in conformity with the terms of the charter party”. The said clause meant that the master was concerned with taking delivery of the goods and issuance of mate’s receipt and that charterer or his agent was authorised to issue the Bills of Lading. So far as the authority to issue the bill of lading is concerned, that was to be given to the charterer or their agents, or course, on behalf of the master and the only condition was that the bill of lading is to be in conformity with the terms of the charter party. If that was so the authority granted to Shaw Wallace to issue Bill of Lading by the shipowner was absolute and irrevocable by or at the instance of the shipowner. There is a clause in the charter party agreement that the owners guarantee to issue clean Bills of Lading and marked freight prepaid

43. That the authority and power to issue the Bill of Lading is vested in the Charterer or his agent is a very material fact which was wilfully and deliberately suppressed from the plaintiff althroughout. The whole purpose of obtaining an irrevocable letter of credit payable against bill of lading, can easily be frustrated by the buyer, if he himself or his agent is to issue Bill of Lading. If this fact would have been known to the plaintiff prior to shipment, they might have refused to ship or might have insisted on issuance of Bill of Lading, prior to the ship left the Calcutta Port or immediately on placing the cargo on board the ship.

44. The letter of appointment of Shaw Wallace dated 16-10-78, which has been tendered in evidence in this suit, also proves that Shaw Wallace & Co., was the nominee of the Charterer, Ngoh Hong Hang (Pvt.) Ltd The said letter reads as follows :– “In accordance with charterer’s request to assign the vessel under your agency for this fixture, we, on behalf of owners, wish to confirm your appointment to act as owner’s protective agent, for which the agency fee of US Dollar 350 will be paid to you. “Shaw Wallace have not disclosed the circumstances in which

such nomination of their company was made by the charterer. There must have been prior negotiations and/or understanding as between charterer and Shaw Wallace. Under the charterer party the Bill of Lading was to be signed by the Charterer or his agent, on behalf of the master. The Charterer obtained this authority in favour of Shaw Wallace. That the power to sign t he bill of lading was vested in charterer or his agent, does not appear to have been made known to the plaintiff prior to the disclosure of the charter party agreement and the said letter of appointment, in this suit.

45. At first, an attempt was made by the witnesses on behalf of the defendant 2, that the defendant 2, did not act as an agent of the charterer, buyer. However, Mr. Puri in questions 393 to 407, ultimately accepted that the defendant 2 was acting as the agent of the said charterer who also happens to be the buyer in this case. Furthermore the telex dated 3rd January, 1979 from the said charterer to Shaw Wallace (Exhibit No. 11) throws a great deal of light in this respect. They refer to a letter of yesterday to Shaw Wallace, which has not seen the light of the day. They are sending Rs. 25000/- by TT to Shaw Wallace. Why should Ngoh Hong Hang send Rs. 25,000/- to Shaw Wallace at this crucial time of making request not to issue Bill of Lading without their confirmation, even if bank guarantee is furnished? The said telex message inter alia stated that they had a counter claim and prior to release of bill of lading, telex confirmation should be obtained from them even though the shipper furnishes the necessary Bank Guarantee. The said charterer states that prior to releasing the bill of lading confirmation from them should be obtained. They also make the request to Shaw Wallace to act as agent on their behalf to do the needful and they (i.e. the purchaser ‘charterer’) will be responsible for all possible legal action. In the end they say, they have sent Rs. 25,000/- to Shaw Wallace. Shaw Wallace have not tried to explain the payment as to on what account and what for they received this payment from Ngoh Hong Hang.

46. The letter of Shaw Wallace and Co. dated 15th January, 1979 also appears to have

been written on behalf of the said Ngoh Hong Hang (P) Ltd. as a principal to Shaw Wallace & Co. This position was at first denied by the witnesses on behalf of the defendant 2. Mr. Puri ultimately accepted that fact during his evidence. Furthermore, in the said letter the writer has referred to the owners of the ship as owners and the principals referred to in the said letter is different from owners and the same must be Ngoh Hong Hang, as accepted by Puri. It is to be noted that the communication authorising the issuance of the said letter dated 15th Jaunary, 1979 has not been disclosed. The said letter relates to two ships, i.e. ‘Pichit Samut’ and ‘Eastern Grand’ having different shipowners. No letters , or communications from the shipowners have been disclosed. Ngoh Hong Hang was the common charterer in respect of both the ships and Shaw Wallace the common agent in respect of both. There is no doubt that the letter has been written at the instance of and on behalf of Ngoh Hong Hang.

47. There is also a very important question as to why and under what conditions this demand for demurrage was at all made and whether it was a proper or justified demand to be made. The notice of readiness was accepted by the forwarding agent of the plaintiff on the 28th November, 1978. If the said date is to be the date for commencement of leading then there is no question of any lay days or demurrage. The ship came to the sandheads on or about 6th November, 1978 and it has been claimed that the lay days are to be counted from 9th November, 1978. There are other documents in which 11th November has been claimed to be the date for counting lay days. The telex message dated 30th November, 1978 from Grand Fortune Ltd. (Shipowner’s Singapore agent) to Shaw Wallace & Co. refers to the telex of Shaw Wallace & Co. Ltd. dated 29th November, 1978 and an earlier telex dated 28th November, 1978. The said telexes are within the special knowledge of the defendant 2 and they have not been tendered in evidence. The Court can draw adverse inference and hold that the said telex messages if disclosed would have gone against the defendant 2. The conduct of the shipper has been referred to as wrongful, as per the advice of Shaw Wallace & Co. It appears that Shaw Wallace

& Co., knowing fully that claim of the shipowner if any under the charter party, were to be against Ngoh Hong Hang (P) Ltd., the charterer, started instigating the shipowner against the shipper. How could the shipowner till then think that the shipper’s conduct was unethical. Though the defendant 2 was making complaints to shipowner, it is to be noted that they had not made any claim from the shipper whatsoever until long after, the loading of the cargo was completed on ‘Pichit Samut’ and thereafter on ‘Eastern Grand1 and the ships left the Port of Calcutta. If they felt the need of writing against the shipper, to the shipowner, there were for greater reasons for them to write to or make claims from the shipper, which was never done until after the loading was completed on this ship and also on the next ship and the ships left the Port of Calcutta. Though the alleged instruction not to issue the bill of lading was received according to Shaw Wallace on 5th December, 1978, the same was kept in cold storage, by Shaw Wallace, until the loading on Eastern Grand’ commenced on 6-12-78 and was completed on 29-12-78. Any whisper by Shaw Wallace on 5th December, 1978 or 6th December, 1978, could frustrate, their principal Ngoh Hong Hang’s plan to get another shipload of rice which they planned to get free from payment. In fact what has transpired in evidence, was, that there was another ship by the name of ‘Ricky’ on the berth which was being loaded and that there was a strike from 16th November onwards, which caused the delay in berthing of the ship. In any event unless the ship is berthed and notice of readiness is accepted, the question of holding Nepal Food to be responsible, for commencement of loading could not arise. I do not find anything on record whereby Nepal Food had undertaken any liability or responsibility except loading the available cargo, in the manner as mentioned in the contract. In any event whatever be the claim, the same could only be realised by the shipowner from the buyer/charterer at whose instance, the ship was brought to Calcutta and who had agreed with the shipowner to pay all freight demurrage and other charges.

48. Shaw Wallace relied on telex message

dated 5th December, 1978 from Grand Fortune to themselves. This telex message mention “we wish to advise that in view shipper/charterers dispute on the lay days, therefore, please do not issue repeat not to issue bill of lading to shippers unless you receive instructions from this office.”. Apart from the fact that this telex message was disclosed only at or about the time of trial, it appears that it purports to be merely a copy and not the original telex message. Furthermore it is an unsigned document and a copy of original. A document of this nature could originate from any source. Even Ngoh Hong Hang could send a message like that, assuming it was acutally received by Shaw Wallace. The witnesses on behalf of the defendant 2 do not say that they themselves received such message. Furthermore the person sending the alleged message, has not been called to give evidence. What happened to the original? Furthermore, if such telex message was received, why they had not written any thing to the shipper who was the real person concerned There is nothing on record that they had written any thing to the shipper in this regard. Thereafter, the telex message dated 12th December, 1978 is said to have been received by the defendant 2 from Grand Fortune asking them to request the shippers to furnish Bank Guarantee in exchange for issuing and releasing the bills of lading. This message if any definitely called for a communication from Shaw Wallace and Co., to Nepal Food Corporation or their forwarding Agent M/s. Asian Agency. This is to be noted that by this time neither the ship had discharged the cargo nor had the letter of credit expired. However, Shaw Wallace and Co., did not send any communication to Asian Agency or Nepal Food Corporation. Furthermore from the documents tendered by Shaw Wallace in Suit No. 1010 of 1979, it appears that Mr. Hang of Hong Hang was camping in Calcutta on 12-12-78 and he gave instructions both to the owners agent of Eastern Grand and also to Shaw Wallace, to take more cargo on Eastern Grand. That decision of Ngoh Hong Hang was duly communicated by Shaw Wallace to Asian Agency. But these two communications dated 5-12-78 and 12-12-78 were kept to themselves because if communicated on 5th

or 12th December, the principal Hong Hang, could be totally deprived at least of getting the free shipment on ‘Eastern Grand1. Even -‘in the statement of facts which was sent by the defendant 2 to the forwarding agents on or about 13th December, 1978 nothing appears to have been mentioned about any claim as against the shipper in particular. On or about 28th December, 1978 a letter was written for the first time to Asian Agency stating that lay time will be counted on the basis of vessel arriving in port on 9th November, 1978. Here again whether the claim for lay time is to be realised from the charterer or from the shipper is not made clear nor is the amount of the alleged claim mentioned. The ship had come under a charter party agreement and the claim if any is to be under the charter party agreement, as against the character. It is only when the Asian Agency sent a telex message on 1st January, 1979, demanding the issuance of bills of lading, that the telegram dated 3rd January, 1979 was sent to Asian Agency. This telegram again is not very clear. This says owners want you to furnish Bank Guarantee towards payment of demurrage before we release bill of lading. What would be the amount of Bank Guarantee is not mentioned. Furthermore, this telegram reads, ‘we may release bill of lading upon receipt owner’s instruction’. It should be remembered that the goods had already been unloaded at the destination, prior to the letter of 28th December, 1978.

49. On 15th January, 1979 that is to say the exact date on which the letter of credit was to become inoperative, Shaw Wallace wrote a letter which must be on behalf of Ngoh Hong Hang (P.) Ltd, as principals, giving the demurrage and claim figures in respect of 2 vessles i.e. one PICHIT SAMUT to the extent of 30,000 US Dollars and other in respect of ‘Eastern Grand’ for US Dollar 77,000/- on account of dead freight and demurrage. The particulars of the claims are not fully given. The name of the principals, for whom the letter had been written is also not disclosed, in the body of the letter. Shaw Wallace have also not disclosed in this suit the communication of the principals, pursuant to which the letter was written. As already discussed earlier, the owners of the two ships

were different. The only common factors were the Charterer and the agent. The communications pursuant to which the letter dated 15th January, 1979 was issued, have been suppressed and not even disclosed in the oral evidence.

50. In spite of these claims against the plaintiff it is to be noted that ultimately the bills of lading were issued on the 25th January, 1979, without even insisting for or realising any such alleged claims. By that time the whole purpose of the defendants and/or the buyer/character, to defeat the realisation of price by letter of credit, was fulfilled. The goods had already been discharged at the port of destination and disposed of. Due date of letter of credit had already expired. Nepal Food Corporation had no means of realising their dues either by encashment of letter of credit or by following the goods. The Shipowner seems to have become extremely obliging by orally instructing Shaw Wallace for issuing the bills of lading even without realising any thing on account of the alleged claim for demurrage.

51. How could be shipowner part with the goods, without issuing the bills of lading and without authority of the shipper Nepal Food Corporation, is another question which remains unanswered. Mr. Chakraborty did not even try to submit that the conduct of the shipowner was justified. If the bills of lading themselves were not issued there was no question of delivering the goods. It suggests that the shipowner or its Singapore Agent were quite oblivious to the true circumstances and were ready to help Ngoh Hong Hang, in any manner and/or to carry out their instructions. The conduct of Shaw Wallace also proves that they were only interested to oblige the charterer principal of theirs, no matter whether the shippers rights are defeated in that process.

52. Under the Charter party agreement the power to issue the bill of lading has been vested in the charterers or their agents and the master was to authorise them for that purpose. Shaw Wallace and Co. Ltd, acted as an agent of the shipowner as also of the charterer. They did not disclose the true facts as to how and under what circumstances they

were nominaled by the charterer. The charterer could not get their appointment confirmed, without first getting their consent. The understanding and/or agreement as between the charterer and Shaw Wallace at or prior to such nomination has not seen the light of the day. The conduct of Shaw Wallace clearly shows that they were acting to protect the alleged interest of the said buyer/character, and to defeat the lawful rights of the plaintiff. They had a statutory obligation to issue the bills of lading on demand against the production of the mate’s receipts which they failed and neglected and/or refused to do during the period from 4th Dec. 1978 to 25th January, 1979. Even assuming such demand was made on 17th Dec. 1978 they had an obligation to issue the bills of lading on that date of demand. This obligation was a statutory obligation. Shaw Wallace & Co. as admitted by Mr. Puri, were fully aware that with holding of the issuance of bill of lading could result in non-enactment of the letter of credit. Mr. Puri in his answer to questions 15 and 16 accepted that the shipper can demand a bill of lading in exchange of Mate’s receipt and that getting of money is dependant on the getting of bill of lading. He said mate’s receipt is a negotiable document and in exchange of mate’s receipt the shipper gets a bill of lading, In answer to questions 24 and 25 Mr. Puri stated that a party (Shipper) is eager to get the bill of lading immediately after loading the goods. Suppose they load the goods at 11 O’clock, they come to our office at 12 O’clock. He says we give the bill of lading on receipt of Mate’s receipt, unless there is no particular clause. What this alleged ‘particular clause’ was there as between the shipper and the shipowner he did not try to specify. In answer to question 30, he accepted that the agent was obliged to issue bill of lading in exchange of Mate’s receipt except that if there was any qualification on the mate’s receipt, the same will be mentioned also in the bill of lading. In answer to question 32, he accepted that the mate’s receipt in this case was unqualified. In answer to question 39, he said that he would have issued the bill of lading on 4-12-78. If the right to obtain bill of lading was there on 4-12-78, the same in my opinion could not be taken away by any alleged instructions of

alleged shipowner and Shaw Wallace continued to be obliged to issue the bill of Lading on demand.

53. In my opinion, Shaw Wallance & Co. Ltd., failed to carry out their statutory obligation which was also the contractual obligation. I have used the word constructual because, Clause 1 of the bills of lading being Ext. ‘E’, provides that the Hague rules, as enacted in the Country of shipment shall apply. Therefore, the said rules apply both contractually as well as statutorily.

54. Furthermore, the alleged claim of the shipowner for demurrage as against the shipper or of their alleged right to withhold the bills of lading on that ground was not a genuine claim and in any event neither the shipowner nor M/s. Shaw Wallace & Co. Ltd. were entitled to claim the same from the plaintiff and factually also after the wrongful objectives were achieved namely discharge of cargo and expiry of letter of credit, they did not press for the same on 25th January, 1979 i.e. at or before handing over of the bills of lading, nor has the same been pressed any further since then in any proceedings. It is apparent that the allegled claim as against the shipper, was not a bona fide claim. In any event the alleged right not to issue and/or to withhold the bills of lading was in violation of the duties and obligations of the defendants No. 1 and No. 2 both and the same was also in violation of the rights of the plaintiff to get bills of lading forthwith on demand. In my opinion the shippers had a right to get the Bills of Lading in exchange of the Mate’s receipts, from Shaw Wallace & Co. Ltd. The said Mate’s receipts were clean mate’s receipts issued on the forms of Shaw Wallace & Co. Ltd and Shaw Wallace accepted responsibility for the due issuance thereof. It can also very well be said that Shaw Wallace represented that they were authorised agents of the defendant 1. They also represented that they will issue bills of lading in exchange of the Mate’s receipt. It was on these representations that the said ship was allowed to leave the port of Calcutta and the shipper can be said to have altered his position, relying on the representations of Shaw Wallace, at or before the ship was allowed to leave Calcutta Port. Shaw Wallace took up on themselves the

obligations to issue the bills of lading in exchange of the Mate’s receipts on demand and they were estopped from contending otherwise. But for the wilful and deliberate acts of commission and/or omission on the part of Shaw Wallace, the plaintiff could not be deprived of the value of the said goods. Shaw Wallace with their eyes wide open and knowing full well the consequences, allowed this injury to be caused to the plaintiff, and allowed themselves to be use as a tool in the hands of the said charterer/purchaser M/s. Ngoh Hong Hang (Pvt.) Ltd. and also the defendant I, who it appears, were acting in close co-operation with each other, otherwise in my opinion there could not be any valid ground for defendant 1 to ask Shaw Wallace on the one hand to demand alleged demurrage from shipper which demand on the face of it is in violation of the terms of the charter party agreement and on the other hand to deliver the goods at destination, without production of bill of Lading which to their knowledge had not been issued.

55. The Bills of Lading were documents of title in respect of the goods belonging to the plaintiff. The plaintiff as holder of the mate’s receipts, had a right to get possession of the bills of lading in exchange thereof. Withholding the issuance of the said bills of lading, to the shipper for any length of time, was contrary to or inconsistent with the plaintiff shipper’s rights of ownership and of possession in respect of said goods and/or the documents of title relating to the said goods covered by the said Bills of Lading. Buyer and the charterer happens to be the same person and the buyer was interested in withholding the issuance of Bills of Lading during the currency of the Letter of Credit, so as to defeat the rights of the plaintiff. Shaw Wallace & Co. Ltd., was under a statutory as well as contractual obligation to issue the Billls of Lading to the plaintiff or his forwarding agent on demand. The said Shaw Wallace & Co. Ltd. failed to carry out their statutory obligations if not from 4th Dec. 1978, at least on and from 17th Dec. 1978 until 25th Jan. 1979 and this resulted in a loss to the plaintiff to the extent of the value of the said goods which amounted to Rs. 1,05,32,459.22? which is the invoice value of the said goods as per exhibit ‘I’ series and also by the oral evidence. If the said bills of

lading would have been issued in time on demand then the plaintiff in my opinion, would have been able to realise the said sum of money by encashing the Letter of Credit which was operative till 15th Jan. 1979 as per exhibit ‘B’ series. In my opinion M/s. Shaw Walace & Co. Ltd., committed the tort of negligence as against the plaintiff in respect of the said Bills of Lading which were the property of the plaintiff thereby causing loss and damages to the plaintiff. M/s. Shaw Wallace & Co. Ltd, were acting as agents for the buyer/charterers and their acts and conduct in withholding the issuance of bill of lading was intended to help the said buyers/charters, which was in conflict with their obligations to the plaintiff.

56. In the case reported in (1976) 1 All ER 97, Rose v. Plenty , it was held that although the milkman’s acts of employing the plaintiff and carrying him on the float were prohibited, they had been performed by the milkman within the scope of his employment, having been performed for the purpose of the employer’s business. Accordingly the employers were vicariously liable for the milkman’s negligence and the appeal was therefore allowed.

57. In Restatement of the Law (2nd edition) para 343 at page 105 it is stated as follows: —

“An agent who does an act which is otherwise a tort, is not relieved from liability by the fact that he acted at the command of the principal or on account of the principal, except where he is exercising a privilege of the principal, or a privilege held by him for the protection of the principal’s interests or where the principal owes no duty or less than the normal duty of care to the person harmed.”

58. In the case reported in (1857) 7 E&B 704 and 26 LJ QB 281, Scuster v. Mckellar and Young, it was held that the master was not justifed in signing and delivering Bills of Lading to C without the production of the mate’s receipt. That the matter was therefore, liable for conversion of the speller; and that the shipowner had also made himself liable by his letter to the master.

59. In the case reported in (1868-69) LR4

Exch 169, Parkes v. Prescott it was held that where a man makes a request to another to publish defamatory matter, of which for the purpose he gives him a statement, whether in full or in outline, and the agent publishes that matter, adhering to the sense and substance of it, although the language be to some extent his own, the person making the request is liable to an action, as the publisher,

The argument of Mr. Bachawat was that Shaw Wallace & Co. Ltd. were also liable for conversion by their act and conduct in the facts and the circumstances of this case. Mr. Bachawat submitted that in paragraphs 15 and 16 of the plaint various statement of facts have been made and a case of conversion as against the Defendant 2 has also been made. He submitted that there were sufficient allegations of conversion in the plaint and for this purpose he relied on the form 2 at page 137 in Atkins on Court forms (2nd edition) volume 39. For this he relied on a passage in Carver on Carriage by Sea (12th edition) volume 1, Article 53 at page 43 which is as hereunder : — “The shipper is usually entitled to have a duly signed Bill of Lading given to him. As we shall see hereafter the document is both evidence of the contract and also a document of title to the goods, by the negotiation of which the property in the goods may be transferred and delivery of them constructively given.”

60. In Falke v. Fletcher reported in(1865) 144 ER 501, it was held that refusal to give bills of lading at 16S 6d unless the difference in rate were paid, as required, amounted to a refusal and to conservation of them. But in that case the captain, in so refusing, was in effect setting up the title of another person to the goods. On the other hand in Jones v. Hough, (1879)5 Exch 115 a wrongful refusal to give a bill of lading for goods received on board to be carried under a charter party, under circumstances in which there was no intention to deprive the shipper of his property, was held not to amount to a conversion to give a right to damages if any could be shown.

61 Where the charter partry requires that the master shall sign the bills of lading, it is not satisfied by the owners signing or being willing to sign.

62. He also relied on a passage in Winfield on Tort (11th edition) at page 449 which inter alia states that taking of goods for the purpose of carrying or of temporary user have been held to be conversion. He also relied on a passage in Halsbury’s Laws of England Volume 45 para 1446 at page 669 which states as hereunder : —

“To make a person liable for conversion it must be proved that the act of conversion was committed by him or by a person for whose act he is responsible. An employee or agent may be held liable whether he has or has not authority from the employer for his act. An employee or other person who is entrusted with the safe keeping of the goods is liable for conversion if acts committed by an employee, agent or independant contractor to whom he has delegated any part of his duty of care, whether he is authorised for the conversion or not.”

63. In the case of Hiort v. Bott, (1874) 9 LR Exch 86, a consignment of barley was sent by mistake to the defendant. The defendant had not in fact ordered any barley from the plaintiff. G called on the defendant, who showed him the documents, and told him it was a. mistake. G said that it was so, and asked the defendant to endorse the order to him, for the purpose, as he said, of saving the expense, of obtaining a fresh delivery order. The defendant endorsed the order to G. who possessed himself of the barley and disposed of it, and then absconded. On the trial of an action of to over for the barley, the Jury found that the defendant had no intention of appropriating the barley to his own use but endorsed the order for the purpose of correcting what he believed to be an error and returning the bare barley to the plaintiff: —

Held that the defendant having endorsed the order without any occasion to do so, and without authority, was liable. Bramewell, B held that constituting a conversion is where a man does an unauthorsed act which deprives another of his property permanently or for an indefinite time.

64. In Jones v Hough reported in (1879) 5 Exch 115 facts are as follows : —

By a charter party the defendants agreed to carry for the plaintiffs a cargo of coke from C

to B. The master to sign the bill of lading as presented within twenty-four hours after the cargo should be on board, or pay 4d per day per ton for each day’s delay as damages. The cargo having been loaded, a bill of lading was presented to the master which he refused to sign without inserting a clause that the vessel should not be liable for duties on cargo caused by non-arrival before a specified date. The plaintiffs having declined to accept such a bill of lading, the master sailed with the cargo for B without signing any bill of lading. The plaintiffs directed their consignee to deduct the penalty under the forgoing clause. The master was willing to deliver the cargo on payment of the freight in full, but the consignee having insisted upon deducting the penalty, the master refused to deliver the cargo, and landed it and stored it at B : –held (1) That there had been a breach of the charter party, in the master not having signed the bill of lading as presented to him; (2) That the plaintiffs were not entitleld to deduct the penalty for delay in signing the bill of lading. (3) That there had been no conversion of the cargo. (4) The plaintiffs were only entitled to nominal damages for not signing the bill of lading the master being willing to deliver the cargo on payment of the full freight. Chief Justice Coakburn held that if in the present case the master refusing to sign such a bill of lading, as he ought to have signed, the plaintiff had said, “then give us back our cargo we are not prepared to send the cargo to Spain without a bill of lading”, the case might have been very different and might have come, I do not say it would, within the facts and authority of Peek v. Larsen (1871) LR 12 Eq 378 but such were not the facts here.

65-66. In Teer v. Freebody reported in (1858) 140 ER 1071 it was held that a wrongful exercise of claim of lien on the materials even though in bona fide belief that he was entitled to do, so, it was held that it amounted to conversion.

67. The defendant in the instant case wrongfully withheld the issuance of the bill of lading of the plaintiff. The defendant 1 had no lien over the said bill of lading for realisation of the alleged claim of the defendant 1 for demurrage. The plaintiff had an absolute right to obtain bills of lading

from the defendant 2. The alleged claims if any in terms of the charter party agreement were sufficiently secured by the goods over which the the defendant 1 had a lien. In any event, the defendant 2 had no right to withhold the issuance of the bill of lading to assist the realisation of the alleged counter claim if any of the said charterer and/or the buyer. The defendant 2 by withholding the issuance of the said bills of lading dealt with the property of plaintiff inconsistently with the rights of the plaintiff and is therefore also guilty of conversion.

68. The bill of lading is a document of title to goods and the plaintiff was entitled to immediate possession of it on demand which the defendant 2 wrongfully refused to make over to the plaintiff, in purported attempt to assist charterer in realising its purported claim. As a result of this wrongful act of the defendant 2 the plaintiff suffered loss and damages to the extent of the value of the said goods.

69. Mr. Chakraborty relied on Article 759 of Halsbury’s Laws of England volume 43 at pages 523 and 543. He submitted that the Hague Visby rules do not apply to charter parties but even according to him if bills of lading is issued under charter parties, they must comply with the rules. In the present case there was a charter party and bills of lading were to be issued in the premises they must comply with the Rules. Mr. Chakraborty however wanted to submit that if Bill of Lading are issued under charter parties, the only obligation required is with regard to the contents of the bill of lading and not other rules. I do not find any basis for such a limited meaning.

70. In the instant case the Hague Visby Rules were applicable both by the statute as also by contract. The very first clause in the bill of lading provides that the Hague Rules contained in the International convention for the unification of certain rules relating to bills of lading dated Brussels the 25th Aug. 1924, as enacted in the country of shipment shall apply to this contract.

71. I hold that the defendant 2, was bound to issue, and had a legal duty both statutory

and contractual to issue the bills of lading on demand and that it failed and neglected and refused to do so in time on and from 17th Dec. 1978 till 25th Jan. 1979, and as a result the plaintiff suffered damages which are equal to the value of the goods as aforesaid.

72. The defendant 2 wrongfully claimed a right not to issue and/or to deliver the said bills of lading to the plaintiff, who according to me had the absolute right to hold and possess the same from the respective dates of the said bills of lading. The defendant 2 further claimed the right to withhold the issuance of the said bills of lading, from the respective dates thereof, until the same were actually delivered to the plaintiff which included the period from 17thDec. 1978 to 15th Jan. 1979. The defendant 2 by its aforesaid wrongful acts prevented the plaintiff from encashing the Letter of Credit and thus the defendant 2, acted inconsistently to the rights of the plaintiff, in respect of the said bills of lading, which were documents of title to the said goods. It was well within the knowledge of the plaintiff that withholding of issuance of bills of lading under alleged claim of lien, even of the defendant 1, could prevent the plaintiff from encashing the letter of credit and in fact it did prevent the plaintiff from encashing the said Letter of Credit. Neither the defendant 1, nor the defendant 2, had any right to withhold the said bills of lading or the issuance thereof and/or the deliver thereof to the plaintiff, who had the immediate right of possession in respect of the said goods and/or the said bills of lading being the documents of title in respect thereof. Both the defendants 1 as well as the defendant 2, acted inconsistently with the rights of the plaintiff, in respect of the said bills of lading and such wrongful acts amounted to conversion of the said bills of lading which were documents of title to the goods, and thereby caused damages and injury to the plaintiff to the extent of the value of the said goods.

73. Mr. Chakraborty relied on the case of Trucks Spares Ltd. v. Maritime Agencies Southampton Ltd.’ reported in (1951) 2 All ER 982. That was an appeal from an interlocutory order. In a suit filed by a stranger, who was not the holder of the Bill of

Lading a mandatory order for delivery of the goods was prayed for but was not granted against the carrier.

74. Mr. Chakraborty relied on the above case only to support the proposition that it is not uncommon to withhold bills of lading against the claim of lien. But Court of course did not in that case hold that the issuance of the bill of lading, can be withheld as of right. However, in the instant case, the shipper was not under any obligation to pay any money to the shipowner. The shipowner’s rights if any to claim any demurrage or any other charges were as against the charterer, with whom he had the contract and the same were in any event amply protected by the charter party agreement and the demand if any could be made for such claims, if any, at the port of destination within 30 days after discharge of goods or by exercising a lien over the goods. There was no question, in the instant case of having the goods. There was no question, in the instant case of having any lien over the issuance of the bills of lading, which was a document of title to goods of the shipper. The ship came to the Calcutta port to load a cargo of the plaintiff. The contract of the shipowner was with the purchaser of the said goods of the plaintiff, who agreed to pay the freight, demurrage, dead freight etc. at Singapore. The duty of the shipowner was to obtain goods against the Bill of Lading and the charter party contained a term, whereby shipowner guaranteed to issue clean bills of lading. The alleged conduct of shipowner as also of Shaw Wallace, was in violation of the said express terms of the charter party agreement. It is on evidence before me that a ship is not allowed to leave the port without issuing bills of lading or Mate’s receipt when he has an agent, at the port, who will issue the bill of lading on demand, against the Mate’s receipt. This practice of the Port Commissioner commensurate with their responsibilities as bailees of all cargoes which are loaded from the port. The agent takes upon himself the responsibility to issue such bills of lading on demand against delivery of Mate’s receipt and having taken upon himself the duties of agent of the Shipowner, he cannot after shipment turn round and thereafter say that he has been instructed not to issue bills of lading. In my opinion, the

agent is personally bound to do so. To hold to the contrary would defeat the rights of the shipper, who relies on such representations. It is well known that international trade is conducted on the basis of irrevocable Letters of Credit, which are or can be encashed only by presenting bills of lading. Such Letters of Credit are for limited periods and unless the shipper can get the bills of lading immediately on shipment or within the limited time, his rights may be defeated altogether. In a case like the present one, where the agent had apparent links with the party who opened the Letter of Credit, serious consequences may follow if the agent, acting under instructions of such person or in his interest, withholds the bills of ladinguntil the expiry of the period of operation of the Letters of Credit and thereafter pleads instructions of shipowner in his defence. 1 am inclined to hold that the act of withholding of the issuance of bills of lading were not bona fide and were wrongful and in violation of the plaintiffs rights in respect of the said bills of lading. Such acts or instructions either on behalf of the defendant 1 or on behalf of the defendant 2 were tortious acts in so far as the plaintiff is concerned and were taken in conjunction with or at the instance of the purchaser and each of the defendants No. 1 and 2 are liable to bear the consquences thereof.

75. The last point urged by Mr. Bachawat was that in the instant case the court should also hold that there was a contract of carriage as between the defendant 1 and the plaintiff in respect of the goods. The defendant 2 was an agent of the defendant 1 at Calcutta and when the goods were shipped on board and when the mate’s receipt was issued stating that, the same was issued subject to the conditions stated in the bills of lading, which can be obtained at the agent’s office, there was a collateral agreement as between Shaw Wallace & Co. Ltd. and the plaintiff that such bills of lading can be obtained in exchange of the said Mate’s receipt. For this purpose Mr. Bachawat relied on the Law of Contract by C.H. Treitel (5th edition) at pages 556 and 560. The relevant portions are quoted
hereunder : —

“Agent and third party may incur reciprocal
rights and liabilities under the contract which
the agent makes on behalf of his principal or

under a collateral contract. The agent may also be liable for breach of implied warranty of authority”. “There may be a collateral contract between agent and third party quite distinct from the main contract between principal and third party. Thus an auctioneer to whom goods are given for sale undertakes certain obligations towards the buyer, but they are not co-extensive with those of the seller.”

In the case of Charnoek v. Liverpool Corporation reported in (1968) 3 All ER 473 it was held that though the car was under the contract between insurers and the repairers for repair, it was held that there was a collateral contract between the car-owner and the repairer that the car will be repaired within a reasonable time. It was held that although there was a contract by the owner’s insurers with the repairers to pay for the repairs there was also a contract between the repairers and the owner to carry out the repairs within a reasonable time. It was an implied term of the repairers’ contract with the owner that the repairers would carry out the repairs within the reasonable time, namely five weeks.

76. Again in the case of Chelmsford Auctions Ltd. v. Poole reported in (1973) 1 All ER 810. it was held as follows :-

“At common law a contract was implied between an auctioneer and a purchaser whereby the purchaser agreed to pay the price into the hands of the auctioneer. The auctioneer had a lien on the goods for the whole price until it had been paid. Accordingly, in the event of the purchaser’s default, he was entitled to sue for the price in his own name even though he had received a deposit which covered his commission. Since the plaintiffs conditions of sale proceeded on the basis of the common law, they were entitled to sue in their own name and the appeal would be allowed.”

The court of appeal in that case held that in a sale by auction, there are three contracts. The first is the contract between the owner of the goods (the Vendor) and the highest bidder to whom the goods are knocked down (the purchaser). That is a simple contract of sale to which the auctioneer is no party. That was made clear by Salter J. in Benton v.

Campbell Parker & Co., (1925-134 LT 60). To that contract of sale the auctioneer who sells a specific chattel as an agent is in my opinion, no party. The second is the contract between the owner of the goods (the Vendor) and the auctioneer. The vendor entrusts the auctioneer with the possession of the goods for sale by auction. The understanding is that the auctioneer should not part with the possession of them to the purchaser except against payment of the price; or if the auctioneer should part with them without receiving payment he is responsible to the vendor for the price. As Lord Loughborough CJ said in Williams v. Millington, (1788-126 ER 49 at P51). “In the common course of auctions, there is no delivery without actual payments, if it is otherwise, the auctioneer gives a credit to the vendee, entirely at his own risk”. The auctioneer is-given as against the vendor, a lien on the proceeds for his commission and charges. The third is the contract between the auctioneer and the highest bidder (the purchaser). The auctioneer has possession of the goods and he has a lien on them for the whole price. He is not bound to deliver the goods to the purchaser except on receiving the price in cash; or if he is willing to accept a cheque on receiving, the cheque.

77. Therefore, it was contended that in this case when the plaintiff had shipped on board of the said ship, the said cargo of rice and allowed the said ship to leave the port of Calcutta without issuing actual bill of lading and on issuing the mate’s receipt with knowledge of and on the forms of the defendant 2, which clearly mentioned that the bill of lading can be obtained from the agent, there was a representation by Shaw Wallace & Co. Ltd. that they will issue the bill of lading in exchange of the said mate’s receipt. It is on evidence before me that the Port Commissioners do not allow the ship to leave the port, without issuance of mate’s receipt for the goods taken on board by the ship. In my opinion the shipper can insist on obtaining the bill of lading even before the ship leaves the port of Calcutta if it has no authorised agent here who undertakes to do so. However, in view of the representation and/or assurance as contained in the mate’s receipts which were issued with full consent

and knowledge of and under the letterhead of Shaw Wallace & Co. Ltd., that such bill of lading can be obtained from the agent’s Office, the ship was allowed to leave the Port of Calcutta and the plaintiff suffered a detriment, i.e. they allowed the ship to leave the Port of Calcutta even without issuing bills of lading on the representation and assurance of Shaw Wallace & Co. Ltd. that such bills of lading can be obtained from the agent’s office. After the ship left the Port of Calcutta, Shaw Wallace & Co. changed their attitude. There was a collateral contract between the shipper and the defendant 2, Shaw Wallace & Co. Ltd., that bills of lading will be issued in exchange of the mate’s receipts on demand and on presentation of the mate’s receipts. The said Shaw Wallace & Co. Ltd., in my opinion were under a contractual obligation to issue such bills of lading in exchange of the mate’s receipt. This was a separate and collateral contract as between plaintiff and the defendant 2. By not issuing such bill of lading on demand and in due time the defendant 2, affected the rights of the shipper to encash the letter of Credit. The said Shaw Wallace & Co. committed breaches of the collateral contract as between the plaintiff and M/s. Shaw Wallace & Co. Ltd. After the mate’s receipt was issued, Shaw Wallace & Co. Ltd., had no right to go back upon the representation and assurances contained therein. But for the representations and/or assuarances contained in the said mate’s receipt the ship would not have been allowed to leave the port of Calcutta without issuing bills of lading. In my opinion the said M/s. Shaw Wallace & Co. Ltd., by not delivering and or by not issuing the requisite bills of lading also committed breach of the collateral contract between them and the shipper on and from 17th Dec. 1978 when such demand and/or demands were made. The said M/s. Shaw Wallace & Co. Ltd, had a contractual obligation under the said collateral contract as between the plaintiff and Shaw Wallace & Co. Ltd., and it is no defence for them to plead any instructions from the principal to the contrary if any. The defendant 1, was not a party to the said collateral contract. The contract of carriage might have been between the plaintiff and the defendant 1. But at the same time when the mate’s receipts were

issued with concurrance and consent of and on the form of Shaw Wallace & Co. Ltd., who were claiming to be the agents of the shipowner at Calcutta, mentioning that bills of lading can be obtained in exchange of the Mate’s receipt from the agent, in my opinion therefore there was a collateral contract between the plaintiff and defendant 2 to which the defendant 1 was not a party and the defendant 2 had a contractual obligation to the plaintiff to issue the said bills of lading. In my opinion by not carrying out their contractual obligations under the said collateral contract, the defendant 2 committed breaches of the said collateral contract, also and the consequential damages were the loss of the value of the said goods to the plaintiff.

78. In view, of my findings, aforesaid, I hold that the defendant 2 also committed breaches of contract and 1 answer the issue. No. 2 in the affirmative. So far as the issue No. 3 is concerned I propose to reframe the said issue by adding another ground of conversion in addition to how the issue already stands. All the facts were on the pleading and the parties went to trial with fall knowledge thereof and the evidence tendered is sufficient to enable me to come to that finding in law. No further evidence is necessary in the facts of this case. There frame disuse No. 3will be as hereunder:

“Was there any negligence or breach of obligation on the part of defendant 2 and was there any conversion by the defendant 2 as alleged in paragraphs 15 and 16 of the plaint.”

79. I hold that there has been negligence and breach of obligation on the part of the defendant 2 and the defendant 2 committed the tort of conversion also in receipt of the said bill of lading and/or the goods covered thereby inter alia by withholding the issuance of the bills of lading between 17th Dec. 1978 to 25th Jan, 1979.

80. In my opinion the plaintiff is entitled to succeed on the issue as originally framed as also on the issue as reframed.

81. So far as the issue No. 4 is concerned, I hold that the plaintiff is entitled to a decree for damages equal to the value of the said goods which amounts to Rs. 1,05,32,459,22. I am not inclined to grant any interest for the

period from Dec. 4, 1978 to Dec. 3, 1979. Plaintiff is also entitled to interim interest and interest on judgment @ 9% on the said amount of Rs. 1,05,32,459.22p. on and from the date of the institution of the suit unitl payment. In the premises there will be a decree in favour of the plaintiff against the defendants for the sum of Rs. l,05,32,459.22p and also for interim interest and interest on judgment @9% on the said sum of Rs. 1,05,32,459.22p. until payment. The plaintiff is also entitled to costs of this suit and all proceedings thereunder. The interlocutory order directing the plaintiff to furnish security for costs, will stand vacated. Certified to be a fit case for engagement of two counsel.