ORDER
1. This appeal is preferred against the judgment and decree passed in O.S. No. 3016 of 1984 by the II Assistant Judge, City Civil Court, Madras on 1.9.86,
2. Plaintiff is the appellant herein.
3. The plaint averments can be summarised as follows: The ship “ZARATHUSTRA” of which the first defendant is the Shipping Agent, arrived at Madras on 6.6.78 and amongst other goods a consignment of 100 bales second-hand refugee clothings under mark Mr. Ramachandran, Madras-1/100 was landed. The plaintiff as usual on the defendant’s request, received and rendered the necessary services therefor. No one filed any import application with defendant’s delivery order for clearance of the consignment and as it was lying in the plaintiff’s transit area uncleared for a considerable time, the same was removed to the Uncleared Goods Warehouse. The plaintiff thereupon gave notice to the defendants on 14.2.79 that application is being made to the Customs for the sale of the goods under Section 61 of the Madras Port Trust Act. The first defendant repudiated the liability on untenable grounds. There was however no response from the second defendant, The consignment was confiscated by Customs on 22.1.79 under their order No. 58/335/78-Gr.III. The first defendant as Steamer Agent and the second defendant as a consignee of the cargo are both liable to pay charges due to the plaintiff for the services rendered to the consignment upto the date of confiscation. The total amount due to the plaintiff on the consignment in respect of the services rendered is a sum of Rs. 97,194.89 and the same is still due and payable to the plaintiff by the defendants. The defendants have failed and neglected to pay the same inspite of repeated demands, including the legal notice dated 14.5.80. The plaintiff prays for a judgment and decree directing the defendants to pay the plaintiff the sum of Rs. 97,194.89 either jointly or severally together with subsequent interest at 12% per annum.
4. The first defendant in its written statement repudiated its liability and contended as follows: The suit against it is not maintainable as it acted only as an agent of a disclosed principal and it is not personally liable under Section 230 of the Indian Contract Act. It is true that the vessel ‘ZARATHUSTRA’ under the agency of the first defendant called at the Port of Madras in or about June 1978 for discharging the quantity manifested for the Port of Madras. Amongst other consignments, 100 bales of second hand refugee clothings were discharged into the custody of the plaintiff for ultimate delivery to the second defendant, namely, the consignee. Under the provisions of the Major Port Trusts Act and also as per the practice, the carrier is prohibited from giving direct delivery to the consignee. The plaintiff who takes charge of the cargo landed from the ships, delivers it to the consignee. It is the practice of the steamer agents like the first defendant to inform the various consignees of the arrival of the vessel and it is for the consignees to arrange for clearance of
the consignments, after complying with the necessary import formalities. The carrier of the first defendant has nothing to do with the delivery of the cargo and their liability, if any, ceases immediately on the discharge of the cargo from the ship’s tackle. Under Section 42(7) of the Major Port Trusts Act, once the cargo is delivered into the custody of the plaintiff, it is only the plaintiff who becomes liable to account for the cargo taken charge of into their custody and consequently, the plaintiff cannot have any recourse against the first defendant in respect of the cargo landed from the ships. So far as this case is concerned, a delivery order was issued by the first defendant to the Associated Transport Limited, the clearing and forwarding agent of the first defendant on 3.5.78 on the surrender of the original bill of lading with a view to clear the cargo landed by the vessel. The first defendant is not aware as to why an import application was not filed with the plaintiff. The first defendant’s principal, as a carrier, was only responsible under the contract of carriage to carry the consignment and to discharge the same into the custody of the plaintiff. The first defendant or its principal had no right, title or interest over the cargo and as such, the first defendant is not liable for any services rendered to the cargo subsequent to discharge. Admittedly, the cargo was not cleared by the second defendant and the same was removed to the Uncleared Goods warehouse. This was only on account of the acts of omission and commission on the part of the second defendant and the first defendant had nothing to do with the alleged claim. In any event, the plaintiff failed and neglected to bring the cargo for auction soon after the expiry of the statutory period of two months and on account of such laches, the plaintiff is estopped from claiming any amount at all. The plaintiff’s, remedy rests only against the second defendant who being the beneficiary in relation to the cargo and only he will be liable for the suit claim. The first defendant is not liable to compensate the plaintiff for the sum claimed in the suit.
5. The second defendant remained ex parte.
6. The trial Court on a consideration of the matter, came to the conclusion that the first defendant’s responsibility as agent for the Ship ceases as soon as the consignment landed in Madras Port and the consignee, namely, the second defendant ought to have taken delivery of the consignment from the Port Trust and since the second defendant had not done so, he is liable for the suit claim and decreed the suit with costs as against the second defendant and at the same time, dismissed the suit as against the first defendant without costs. Aggrieved by the order of dismissal of the suit as against the first defendant, the plaintiff has preferred the present appeal. For the sake of convenience, in this Judgment, the parties are described as arrayed in the suit.
7. The only point that arises for determination in this appeal is whether the first defendant is liable to pay the demurrage charges to the plaintiff.
8. POINT:– The plaintiff Port Trust has filed the suit for a decree directing the defendants, namely, the Steamer agent and the consignee of the cargo to pay the plaintiff a sum of Rs. 97,194.89 being the demurrage charges
incurred in respect of the cargo. The first defendant contends that the carrier of the first defendant has nothing to do with the delivery of the cargo and their liability ceases on the discharge of the cargo from the ship’s tackle and they have no right, title or interest over the cargo and it is for the second defendant to remove the cargo and hence the first defendant is not liable for the suit claim. It is further contended by the first defendant that a delivery order was issued to M/s. Associated Transport Limited, the clearing and forwarding agent of the second defendant on 8.8.78, on the surrender of the original bill of lading with a view to clear the cargo, landed by the vessel and the first defendant is not aware as to why an import application has not been filed with the plaintiff by the second defendant. The second defendant, the consignee, remained ex parte in the suit and the suit has been decreed against him. In this appeal, the second defendant is impleaded as second respondent and he has not chosen to appear.
9. The plaintiff’s case is that the first defendant, as Steamer agent and the second defendant as the consignee of the cargo are both liable to pay charges due to the plaintiff Port Trust for the services rendered to the consignment upto the date of confiscation. PW.1 is the Shed Master of the plaintiff and he has stated that no import application was filed by the second defendant with regard to the cargo and the cargo was seized by the Customs. Ex.A1 is the confiscation order. Ex.A2 is the suit notice issued by the plaintiff counsel to the defendants on 2.5.80. DW.1 is the Manager of the first defendant company. He has stated that the first defendant acted as a Steamer agent of the vessel and 100 bags of second-hand clothings was landed by the vessel under Ex.B1 and the consignee is the second defendant. According to him, they have intimated the consignee about the arrival of the cargo and – Ex.B1, namely, the bill of lading was surrendered by the clearing agent of the second defendant and the second defendant obtained a delivery order from them. Exs.B2 and B3 are the endorsements made by the second defendant and the clearing agent respectively on Ex.B1, original bill of lading. DW.1 has further stated that once the cargo is discharged from the ship, the principal or agent have no right or interest in the goods and the first defendant is not liable for the suit claim. Ex.B4 is the reply sent by the first defendant to the plaintiff on 11.2.80 denying its liability. According to DW.1, there are two ways of issuing delivery order. The first one is by making an endorsement on the back of the delivery order and the second one is by surrendering the bill of lading and getting a separate delivery order. He has further stated that in the present case, the second method was followed and Ex.B1, original bill of lading was surrendered to them and they issued a separate delivery order to the second defendant. Ex. B2-endorsement on the back of Ex.B1 was made by the second defendant and Ex.B3-endorsement was made by the clearing agent of the second defendant.
10. The learned counsel for the first respondent / first defendant contends that the responsibility of the Steamer or its agent comes to an end after the bill of lading has been duly endorsed or a delivery order has been
issued and they are not responsible for the custody of the cargo after the property in the cargo passes to the consignee and he relies on the decision of a Division Bench of this Court in K.P.V. Sheik Mohamed Rowther & Co. v. Trustees of the Port of Madras, 1974 T.L.N.J. 284 and the relevant portions are as follows:
“Once the goods are handed over to the Port Trust by the steamer and the steamer agents duly endorsed the bill of lading or issued the delivery order, their obligation to deliver the goods personally to the owner or the endorsee comes to an end.
It cannot be said that the steamer or its agents have undertaken any responsibility for the custody of the goods after the transit has come to an end and after the bill of lading has been duly endorsed or a delivery order issued. By the endorsement of the bill of lading or the issue of a delivery order by the steamer agents, the property in the goods vests in such consignee or endorsee, and thus it appears to be clear that the steamer or its agents are not responsible for the custody of the goods after the property in the goods passes to the consignee or endorsee, till the customs authorities actually give clearance. It should also be remembered that the steamer which had entered into a contract of carriage of goods for a reward cannot be said to have undertaken the responsibility of safe-guarding the goods or keeping them at their risk till the goods are actually cleared from the customs and taken delivery of by the consignee. That will be imposing a too onerous and unexpected responsibility on the steamer which is only a carrier. If they are subjected to such a responsibility, in most cases where the goods are detained without delivery in the hands of the Port Trust at the instance of the customs the steamer or steamer agents have to pay towards storage or demurrage charges amounts quite disproportionate to the freight they collect for the carriage of the goods, no carrier will undertake such a risk and responsibility. The Court is of the view that the provisions of the Act cannot be so construed as imposing an additional liability or obligation on the carrier which was not contemplated by the contract it had entered into with the shipper.”
11. In the above decision, this Court has clearly laid down that by the endorsement of the bill of lading or the issue of the delivery order by the steamer agent, the property in the goods vests in consignee or endorsee and the steamer or its agents are not responsible for the custody of the goods after the property in the goods passes to the consignee. As already seen, in the present case, the second defendant has made Ex. B2-endorsement on the original bill of lading viz., Ex.B1 and handed it over to the first defendant and on the basis of it, the first defendant claims to have issued the delivery order. Hence, it is clear that the custody of the goods has passed on to the consignee, namely, the second defendant and he is alone liable to pay the demurrage charges.
12. The learned counsel for the first respondent drew the attention of the Court to a recent decision of the Apex Court and contended that the plaintiff-Port Trust is entitled to recover charges under the Major Port Trusts Act in respect of the goods from the owner of the goods only. The relevant decision is Board of Trustees of the Port of Bombay and Ors. v. Sriyanesh Knitters, and it is held as follows:
” 25. Section 2(o) contains the definition of “owner”. In relation to goods the said section states that the word “owner” includes any consignor, consignee, shipper or agent for the sale, custody, loading or unloading of such goods. By referring to this Sub-section this Court in Sun Export Corporation v. Board of Trustees of the Port of Bombay, held that in the case of imports the liability to pay demurrage, on the endorsement being made on the bill of lading, would be that of the consignee. This is in consonance with the provisions of the Bills of Lading Act, 1856. The preamble of this Act provides that by the custom of merchants a bill of lading of goods being transferable by endorsement, the property in the goods may thereby pass to the endorsee, but nevertheless all rights in respect of the contract contained in the bill of lading continue in the original shipper or owner and, therefore, it is expedient that such rights should pass with property. Section 1 of the Bills of Lading Act provides that rights under bills of lading vest in the consignee or endorsee and reads as under:
” 1. Rights under bills of lading to vest in consignee or endorsee: Every consignee of goods named in a bill of lading and every endorsee of a bill of lading to whom the property in the goods therein mentioned shall pass, upon or by reason of such consignment or endorsement, shall have transferred to and vested in him all rights of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself.”
The provision of Section 2(o) of the MPT Act regards, in relation to goods, the consignee as the owner thereof. Reading the same along with the Bills of Lading Act the consignee of the goods named in the bill of lading or every endorsee of the bill of lading, for the purpose of the MPT Act, is regarded as the owner of the goods and it is from that owner that the appellant is emitted to recover charges under the MPT Act in respect of the said goods. The High Court was not right in holding that the contract was between the ship-owner and the Port Trust. The correct position is that the contract is between the Port Trust and the holder of the bill of lading which, in this case, would be the consignee. It is the consignee which is the bailor with the Port Trust being the consignee (sic bailee).”
13. The contract is between the Port Trust and the holder of the bill of lading viz., the consignee. The consignee is the bailor and the Port Trust is the bailee and the consignee of the goods, named in the bill of lading for the purpose of Major Port Trusts Act, is regarded as owner of the goods irrespective of the endorsement on the bill of lading or issue of the delivery order by the steamer agent. The Port Trust is entitled to recover charges under the Major Port Trusts Act in respect of the goods from the owner, viz., the consignee. In the present case, the plaintiff is entitled to recover demurrage charges in respect of the goods only from the owner of the goods, namely, the second defendant and the first defendant is not liable for the same.
14. In the result, the appeal fails and it is dismissed. No costs.