Full Judgment Text
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PETITIONER:
BIHAR SUPPLY SYNDICATE
Vs.
RESPONDENT:
ASIATIC NAVIGATION AND OTHERSANDUNITED SALT WORKS AND IND
DATE OF JUDGMENT17/03/1993
BENCH:
YOGESHWAR DAYAL (J)
BENCH:
YOGESHWAR DAYAL (J)
KASLIWAL, N.M. (J)
CITATION:
1993 AIR 2054 1993 SCR (2) 425
1993 SCC (2) 639 JT 1993 (2) 396
1993 SCALE (2)111
ACT:
Marine Insurance Act 1963: Ss. 2, 2(a), 2(e), 3.
Marine Insurance Policy with Institute Cargo Clauses
(FPA)--Suit for recovery of cost of goods lost due to perils
of the Sea--Burden of Proof on Plaintiff.
Code of Civil Procedure, 1908: O.41 Rule 33.
Scope and applicability of--Ingredients of R. 33--Powers of
Court of Appeal--What are.
HEADNOTE:
The plaintiff had purchased crushed and uncrushed salt from
Defendent No. 3 on payment By a charter party agreement
Defendent No. 2, chartered a vessel to Defendent No. 3 for
loading salt at Kandla Port in Gujarat and for carrying the
same to Calcutta Port. The Plaintiff had directly paid to
Defendent No. 2 the freight amount for transport of cargo
from Kandla to Calcutta. Defendent No. 2 had inform
Defendent No. 3 that the Plaintiff is accepted as Sub-
Charteres. The Plaintiff had itself insured the cargo
through the Insurance Company for Rs. 9,50,000. The policy
was for the voyage from Kandla to Calcutta with Institute
Cargo Clauses (FPA) cover attached including warehouse to
warehouse risks and sling loss but excluding war and SRCC
risks.
The plaintiff loaded the salt on the said Vessel at Kandla
for shipment to Calcutta. The vessel left Kandla and the
plaintiff received a telex message form defendent No. 2
informing that the vessel was at an anchorage at Sand-heads
near Calcutta and was experiencing engine
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trouble. The vessel was required to be towed from sand-
heads to Vishakhapatnam as repairs could not be undertaken
at sand-heads. The plaintiff was informed and it in turn
informed the Insurance Company about the said development.
The vessel could not be repaired as the Hindustan Shipyard
who was to carry out the repairs were not paid the requisite
charges by the Owner, Defendent No. 1.
The crew members were not paid their wages and they
instituted an Admirality Suit in the High Court, which
passed an order arresting the vessel including cargo etc.
and appointed a Receiver for the vessel and the cargo.
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Consent was given by the plaintiff for the sale of the
vessel and the cargo. The High Court directed the receiver
to sell the vessel along with the cargo. An amount of
approximately Rs. 12.5 Lacs was received as sale proceeds of
the vessel and the cargo. The plaintiff approached the High
Court requesting to direct the receiver to withhold an
amount of Rs. 9,50,000 for the benefit of the plaintiff
against loss of its goods. High Court declined to grant the
request and the appeal preferred by the plaintiff also ended
in dismissal.
Plaintiff filed a suit claiming recovery of the loss
suffered by him, viz. Rs. 9,50,000. The claim was made
against the owner of the vessel, the charterer and the
Insurance Company.
The Trial Court passed a decree against all the defendents
in the sum of Rs. 10,49,750 i.e. 9,50,000 with interest.
On an appeal by the Insurance Company, the Division Bench of
the High Court dismissed the suit decreed by the Single
Judge against the Insurance Company and other defendents.
Being aggrieved by the High Court’s judgment, the plaintiff
and defendent No. 3 in the suit preferred the present
appeals before this Court.
Dismissing the appeal of the plaintiff, and allowing the
appeal of defendent No. 3, this Court,
HELD 1.1. It is axiomatic that the burden was on the
plaintiff to prove the loss due to perils of the sea and on
the facts of the case, at no stage, such a burden was
shifted on Insurance Company to prove otherwise. [437E]
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1.2. The cables sent by the Master of the ship do not show
that sea water had entered the engine room and it was not a
case of loss of goods due to perils of the sea. The
expression "warehouse to warehouse" merely indicates the
period during which the policy would remain in force and has
nothing to do with the type of the risk policy covered. It
was not a case of abandonment of the goods because of the
perils of the sea. In fact the plaintiff gave the consent
for permitting the sale of cargo and to recover the value
thereof [437B-D]
1.3. Since the finding of the High Court is that no sea
water entered in the engine room and the fact that the cargo
was intact even after the ship was towed to Vishakhapatnam
showed that no sea water entered the ship and, therefore,
the loss to the plaintiff was not on account of perils of
the sea and the suit of the plaintiff against the Insurance
Company i.e. defendent No. 4 was rightly dismissed by the
High Court. [438B-C]
2.1. The plaintiff was dealing itself directly with
defendent No. 2. The plaintiff directly paid the freight
of the voyage to defendent No.2. The plaintiff took the
Bill of Lading in its own name itself. Thus there was no
cause of action whatsoever against defendent No. 3. [438E]
2.2. On the facts and circumstance of the case in so far as
it relates to defendent No, 3, it was a fit case for the
High Court to have exercised power under Order 41 Rule 33
C.P.C. to set aside the decree passed by the trial court
against defendent No. 3 without having discussed any issue
against defendent No. 3 and to decide the case itself The
facts are simple and life in narrow compass and show total
non-liability of defendent No. 3 to the claim put forward by
the plaintiff against it. No cause of action is established
against defendent No. 3 who merely sold salt to the
plaintiff and introduced defendent No. 2, the Charter Party
to the plaintiff. The plaintiff thereafter directly deal
with defendent No. 2 by paying the freight to defendent No.
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2 and by estaining the Bill of Lading in its own name. The
property in goods had already passed on to the plaintiff
before it obtained the Bill of Lading. [442G-H, 443A-B]
Choudhary, Sahu (dead) by, L.Rs. v. State of Bihar, AIR 1982
SC 98: Mahant Dhangir and another v. Shri Madan Mohan and
Others, Al R 1988 SC 54; Pannalal v. State of Bombay and
others, [1964] 1 SCR 980 and Giani Rai?? and others v. Ramji
Lal and others, [1969] 3 SCR 944, relied on. [438H, 439A-G]
428
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4611--
12/.1992
From the Judgment and Order dated 16/17-1-1992 of the Bombay
High Court in Appeal No. 670/88 in Suit No. 641 of 1973.
Dushyant Dave, Ms. Dipa Dixit, Jitender Singh and KJ. John
(For Swarup John & Co., Advs.) for the Appellant.
M.S. Nagolkar, Deepak M. Nargolkar and P.H. Parekh for the
Respondents.
The Judgment of the Court was delivered by
YOGESHWAR DAYAL, J. These are two appeals being Nos. 4611 of
1992 and 4612 of 1992 riled by M/s. Bihar Supply Syndicate,
plaintiff in the suit and United Salt Works and Industries
Ltd., defendant No.3 in the suit respectively, against the
judgment of the High Court of Bombay dated 16th and 17th
January, 1992.
By the impugned judgment the Division Bench of the High
Court, on an appeal, by the National Insurance Company
Limited, defendant No.4 in the suit, accepted the appeal
against the judgment and decree dated 30th September, 1987
passed by the Single Judge in Suit No. 641 of 1973 and
dismissed the suit decreed by the Single Judge against it
and defendant Nos. 1,2 & 3.
The Single judge had passed a decree for a sum of Rs.
10,49,750 in favour of the plaintiff/appellant in Civil
Appeal No. 4611 of 1992, along with interest on Rs. 9,50,000
at the rate of 12% per annum from 17th June, 1973 till
realisation and costs of the suit.
The facts giving rise to the filing of Civil Appeal No. 4611
of 1992 filed by the plaintiff may be noticed.
The plaintiff/appellant is a partnership concern carrying on
business as dealers in salt. Defendent No.1, M/s. Asiatic
Navigation Incorporated is a Company incorporated in United
States and is owner of vessel known as M.V. ’Atlas
Navigator’. The vessel is registered at Panama and flies
the Panama Flag. Defendant No.1 is carrying on business in
Bombay through its agent. Defendant No.2, namely M/s.
Thakur Shipping Company Ltd. is
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a Public Ltd. Company carrying on business of shipping and
operate the vessel Atlas Navigator belonging to Defendant
No.1. Defendant No.3, United Salt Works and Industries Ltd.,
who is appellant in Civil Appeal No. 4612 of 1992 is also a
Ltd. Company and carry on business in Bombay as
manufacturers, merchants and charterers. Defendant No.4 is
a General Insurance Company who, after the nationalisation
of the General Insurance business had succeeded to the
interest of the Skandia Insurance Company Ltd., a Company
registered in Sweden.
By a Charter Party agreement dated 17th June, 1972,
Defendant No.2, chartered the vessel Atlas Navigator to
Defendant No. 3 for loading salt at Kandla Port in Gujarat
and for carrying on the same to Calcutta Port. Clause 14 of
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the agreement enabled Defendant No.3 to sublet the right
under the Charter Party agreement and Defendant No.3 sublet
the said right in favour of the plaintiff. The plaintiff
had purchased from Defendant No.3 itself a cargo of 4434
metric tons of crushed salt at the rate of Rs. 33 per metric
ton and 2741 metric tons of uncrushed salt at the rate of
Rs. 30 per metric ton and had paid a sum of Rs. 6,82,000
towards the price of the salt of Defendant No.3. The
plaintiff had directly paid to Defendant No.2 the freight
amount of Rs. 3,95,000 for transport of cargo from Kandla to
Calcutta. Defendant No. 2 had agreed to arrant,,,; for
carriage of salt from Kandla to Calcutta as per the Bill of
Lading issued in that behalf in favour of the plaintiff.
Defendant No.2. had informed the defendant No.3 that the
plaintiff is accepted as sub-Charteres and necessary steps
will be taken to inform the plaintiff about the movement of
the vessel. The plaintiff had itself insured the cargo
through Skandia Insurance Company against the Insurance
Policy dated 12th July, 1972 and the sum insured was Rs.
9,50,000. The policy was for the Voyage from Kandla to
Calcutta with Institute Cargo Clauses (FPA) cover attached
including warehouse to warehouse risks, including sling loss
but excluding war and SRCC risks. Defendant No.4 is the
successor to the Skandia Insurance Company, as stated
earlier.
The plaintiff loaded 7165 metric tons of salt on the said
Atlas Navigator at Kandla for shipment to Calcutta and
loading was completed on July 4, 1972. The vessel left
Kandla on July 9, 1972 and on July, 28, 1972 the plaintiff
received a telex message from defendant No.2 informing that
the vessel was at, an anchorage at Sand-heads near Calcutta
and was experiencing engine trouble. The plaintiff was
informed that the agent of
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the vessel would be communicated from time to time. M/s.
Shaw Wallace and Company who is the agent of defendant No.2
informed the plaintiff on July 28, 1972 that the discharge
of the vessel will be commenced only after the plaintiff
provided with usual General Average Bond in lieu of the cash
deposit. The plaintiff by its letter dated August 17, 1982
addressed to defendant No.1 complained about failure to
advise movement of the vessel. The vessel was required to
be towed from Sand-heads to Vishakhapatnam as repairs could
not be undertaken at Sand-heads. The plaintiff became aware
of the said facts. Defendant No.2 addressed a letter dated
August 18, 1972 to one R.Ramos of Hexagon Shipping Ltd. and
endorsed a copy to the plaintiff. The letter inter alia
recited that the vessel had been diverted to Vizag along
with the cargo under tow. The plaintiff claimed to have
informed the Insurance Company about the above development.
The repairs to. the vessel were expected to be completed
shortly and vessel was expected to be back in Calcutta with
cargo. The vessel could not be repaired as the Hindustan
Shipyards who was to carry on the repairs were not paid the
requisite charges by the owner, Defendant No.1.
The vessel was neither repaired nor the wages of the crew
members were paid with the result that the crew members
instituted Admirality Suit No.1 of 1973 in the High Court of
Judicature, Andhra Pradesh at Hyderabad. On February 13,
1973 the Court passed an order arresting the vessel
including cargo etc. and appointed a Receiver for the vessel
and the cargo. The consent was given by the plaintiff to
the sale of the vessel and the cargo and the vessel along
with the cargo was sold by order of the Court on March 27,
1973. The order of the High Court directed the Receiver to
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sell the cargo also. The plaintiff, as stated earlier, had
given the consent to sell the cargo. The consent was given
by the plaintiff as it was found that the costs of unloading
the cargo from the damaged vessel was more than the value of
the cargo itself. Subsequently, the plaintiff tried to
withdraw the consent but the Receiver had by that time not
only obtained the order for sale of the vessel along with
cargo but had also auctioned the vessel along with the
cargo. An amount of approximately Rs.12.5 lacs was received
as sale proceeds of the vessel and the cargo. The plaintiff
then approached the Andhra Pradesh High Court requesting
that the Receiver should be directed to withhold the amount
of Rs. 9,50,000 out of the sale proceeds for the benefit of
the plaintiff. The High Court of Andhra Pradesh declined to
grant the request and the appeal preferred by the plaintiff
also ended in dismissal. It was claimed by the plaintiff
that they
431
had informed the Insurance Company about the abandonment of
their right in respect of the Cargo due to inability to
reclaim the cargo from the damaged vessel.
On these averments the plaintiff claimed that defendant No.1
as owner of the ship was bound to deliver the cargo at
Calcutta and having failed to do so was required to pay to
the plaintiff the market value of the goods estimated at
Rs.9,50,000. The plaintiff claimed that defendant No. 2 who
was the charterers and operators of the vessel and defendant
No. 3 as sub-charterer are bound and liable to pay to the
plaintiff value of the goods estimated at Rs. 9,50,000. In
paragraph 38 of plaint it was averred that defendant No.4
had insured under the policy goods from warehouse Kandla to
warehouse Calcutta. The plaintiff claimed that as the goods
were not delivered to the plaintiff at Calcutta and as the
expenses incidental to reshipment to Calcutta were much more
than the insured value, the goods were deemed to be the
total loss. The plaintiff claimed that the goods were
abandoned and notice was given to the Insurance Company and
the Company had acquiesced in and accepted the abandonment
of the cargo by the plaintiff in favour of defendant No.4.
The plaintiff claimed that as they had suffered a loss of
Rs.9,50,000 the Insurance Company was bound to reimburse the
claim to the extent of Rs.9,50,000 under the Insurance
Policy.
Defendant No.1, the owner of the ship did not file the
written statement and trial against it proceeded ex-parte.
Defendant No.2, the charterer filed its written statement
claiming that the master of the vessel intimated that the
engine room of the vessel was flooded and vessel was in a
dangerous condition and the crew was standing by for
abandoning the ship. Defendant No.2 claimed that they are
not liable for the claim made in the suit in view of the
terms and condition of the Charter Party and the Bill of
Lading. Defendant No.3 by its written statement claimed
that defendant No.2 had accepted the sub-letting in terms of
clause 14 of Charter Party and all rights and
responsibilities of defendant No.3 had passed to the
plaintiff and no cause of action arose against defendant
No.3. Defendant No.3 had also pleaded that the plaintiff had
directly paid the freight to defendant No.2 and consequently
the liability, if any, was of defendant No.2 and not of
defendant No.3. Defendant No.3 also claimed that the title
of the cargo was passed to the plaintiff and defendant No.3
had nothing to do with the non-delivery of cargo at
Calcutta.
432
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Defendant No.4, the Insurance Company, filed its written
statement claiming that the plaint did not disclose any
cause of action against the Insurance Company. Defendant
No.4 also pleaded that the plaintiff had not even averred in
the plaint that the owner of the vessel had advised of
abandoning of frustration of voyage and under the
circumstances no claim under the policy could be made.
Defendant No.4 then pleaded that the liability under the
policy should arise provided the perils of the sea had
damaged the cargo as the policy had insured against the
perils encountered. The Insurance Company denied that the
Cargo was deemed to be lost and that the plaintiff had
abandoned the cargo and the Insurance Company had acquiesced
or accepted the alleged abandonment.
On these pleadings the learned trial court settled separate
issues between the plaintiff and defendant No.2; as many as
five issues between the plaintiff and defendant No.3
(appellant in Civil Appeal No. 4612 of 1992) and between
plaintiff and defendant No.4. The issues settled between the
plaintiff and defendant No.4 were as under :-
"(1) Whether the plaint does not disclose any
cause of action against the 4th defendants as
alleged in para 1 of, the written statement ?
(2) Whether the plaintiffs have suffered any
loss due to any of the perils insured against
by the Policy of Insurance dated 12.7.1972 ?
(3) Whether the plaintiffs abandoned the
goods as alleged in para 38 of the plaint ?
(4) Whether the 4th defendants acquiesced in
abandonment as alleged in paras 35 and 38 of
the plaint ?
(5) Whether there was total loss as alleged
in para 38 of the plaint ?
(6) What relief, if any ?
The issues settled between the plaintiff and
defendant No.3 were as under :-
(1) Whether the plaintiffs are a registered
partnership
433
firm as alleged in para 1 of the plaint ?
(2) Whether the plaint discloses any cause
of action as against this defendant as alleged
in para 31 of the written statement ?
(3) Whether this defendant was liable as
sub-charterers to pay the plaintiffs the
market value of the said goods at Calcutta
being Rs.9,50,000 as set out in Ex.’E’ of any
part thereof as alleged in para 3 of the
plaint ?
(4) Whether this defendant is absolved from
all liabilities of the plaintiffs as alleged
in para 28 of the written statement ?
(5) Whether the plaintiffs are entitled to
any relief against this defendant ? If so,
what ?"
The trial court, as stated earlier, decreed the suit of the
plaintiff against all the four defendants. In the present
appeals before us we are not concerned with the rights of
the plaintiff vis-a-vis defendants 1 and 2 as defendants 1
and 2 did not prefer any appeal against the decision of the
trial court. The defendant No.4, namely the Insurance
Company, filed the appeal before the Division of the High
Court whereas defendent No.3, United Salt Works and
Industries Ltd., (appellant in Civil Appeal No. 4612 of
1992) preferred cross-objections on receipt of notice of
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appeal filed by M/s. National Insurance Company Ltd. The
trial court while decreeing the suit against the Insurance
Company held issue numbers 1, 2, 3 in the affirmative, in
favour of the plaintiff and against defendant No.4. On issue
No.4 he held that it was not necessary. Issue No.5 was also
answered in the affirmative and issue No.6 as per the order.
Consequently the trial court decreed the claim of the
plaintiff against all the defendants in the sum of Rs.
10,49750 with interest on Rs. 9,50,000 at the rate of 12 per
cent per annum from 17th June, 1973 till realisation with
costs of the suit.
It is curious that though the trial court found issues as
settled between the plaintiff and defendant No.3 against
defendant No.3 but there is no discussion at all in the
trial court judgment for various findings recorded against
defendant No.3. On appeal by the Insurance Company the
Division Bench of the Bombay High court examined the oral
evidence
434
led by the Insurance Company of its Assistant General
Manager Shri Dhirubhai A. Shah and one of its employee Shri
Mangaldas Keshavji Jagad. The Division Bench also examined
the evidence led on behalf of Defendant No.2 of Sh. Sentu
Vazirmal Ramchandani who had carried out the work of survey
of the damaged vessel at Vishakhapatnam.
Before the Division Bench it was submitted on behalf of the
Insurance Company No.4, that its liability arises out of
Marine Insurance Policy and the plaintiff cannot succeed in
obtaining a decree against it unless it is established that
the goods were lost due to perils of the sea. It was
submitted on its behalf that the plaintiff had not even
averred in the plaint that the goods were damaged due to
perils of the sea. It was also submitted that the trial
court entirely misconstrued the terms of policy and
erroneously concluded that the loss was caused due to perils
of the sea. It was submitted on behalf of the Insurance
Company that the trial court was in error in assuming that
the term in the policy that the risk is covered from
warehouse to warehouse means that the policy covers all
kinds of risks to the vessel and the goods.
On behalf of the plaintiff/respondent No.1 in the appeal
before the High Court, it was submitted on the other hand
that the finding of the trial court that the loss was caused
due to perils of the sea justified. It was also pleaded in
the alternative that the policy covered all risks from
warehouse at Vishakhapatnam to warehouse at Calcutta and as
there was constructive loss of all the goods the plaintiff
was entitled to a decree.
In view of these rival contentions, the High Court felt that
the question which falls for determination is whether the
plaintiff has suffered loss due to any perils of the sea
insured against by the policy for insurance dated July 12,
1972.
After examining the Marine Insurance Policy dated 12th July,
1972 the High Court took the view that the policy of
insurance was subjected to FPA terms as per the Institute
Cargo Clauses (FPA attached) including warehouse to
warehouse risks. It also found that the "plain reading of
the policy makes it clear that claim under the policy is
permissible provided the insured establishes that the loss
was caused due to perils of the sea". Thereafter the High
Court examined four cables on which the plaintiff relied
namely the cable dated 19th July, 1972 sent by the master of
ship which inter alia recites that the engine has stopped
due to damaged boiler
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435
and it further recites that there is no remedy and sought
permission to employ Tegboat; the second cable dated 21st
July, 1972 which stated that the vessel is steaming on power
near Sand-heads; the third cable dated 22nd July, 1972
recited that anchored pilot stationed at Calcutta Port
refused to bring the vessel in the Port due to non-
availability of the engine power and steamer power; the
cable then recited that there is no provision of Water and
urgent assistance is required and the last cable dated 25th
July, 1972 rejected that the engine room had been flooded
and the request for emergency pump had not received any
response. The cable then mentioned that the generator is
likely to shut out any time and the situation has become
very dangerous and crew had been ordered to stand by for
abandoning the ship. The learned Judges of the Division
Bench noticed that from the contents of theses four cables
the trial judge came to the conclusion that the vessel had
suffered casualty on account of the damage to the machine
and the engine and the main boiler not functioning. The
High Court further noticed that trial judge felt that the
cables disclosed that initially there was engine trouble due
to damage to the boiler but later the engine room was
flooded and that had resulted in the condition of the vessel
becoming very dangerous so much so that the crew was
standing by for abandoning the vessel. The Division Bench
also noticed that the finding of the trial court that the
flooding of the engine room could not have been possible
except from the sea water. The Division Bench felt
difficulty in appreciating on what basis the trial judge
proceeded to draw such an inference. After examining the
contents of the four cables the Division Bench took the view
that the contents of the cables no where disclose that the
water which entered the engine room was the sea water. The
High Court felt that it was a matter of common knowledge
that the water is stored an the vessel for the purpose of
ballast. The learned Judges felt that the trial judge’s
finding that the engine room was flooded with sea water and
therefore the vessel had suffered by perils of the sea was
erroneous. The learned Judges of the Division Bench felt
that the trial judge had overlooked that the evidence on
record urmistakably establishes that the vessel was towed
back to Vishakhapatnam; was ultimately arrested by the order
of the Andhra Pradesh High Court and was sold along with the
cargo and they took the view that the finding of the trial
judge that the flooding of the engine room with sea water is
without any basis. The High Court observed "’it is
nobody’s case that the vessel was leaking and the sea water
had flooded in the vessel. The fact that the vessel could
be towed back to Vishakhapatnam and was available for being
arrested and sold in auction,
436
is a telltale circumstance to establish that there was
hardly any damage to the vessel and much less due to perils
of the sea at Sand-sea near Calcutta Port." On the other
hand the High Court gave a finding that there is positive
evidence to establish that sea water had never entered in
the vessel at any time and the cargo had not even been
damaged. The Division Bench also examined the survey report
produced by the plaintiff itself dated 14th March, 1973 made
by Erlcoon and Richards (Andhra) (Ext. IN,) which showed
that the surveyors boarded the vessel on 12th March, 1973
while it was lying alongside J-3 berth, Vishakhapatnam in
order to inspect and ascertain the condition of the cargo on
board. The report establishes that the bulk cargo of salt
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was stored in the vessel’s five numbers hatches and the same
was found in apparent good condition throughout. The High
Court thus gave a finding that the vessel and the cargo had
not suffered due to perils of the sea. The High Court also
on examination of the evidence of Shri R.C. Walia, partner
of the plaintiff clearly gave another finding that "the
case put forward by the plaintiff was that the vessel was
towed back to Vishakhapatnam for effective repairs by
Hindustan Shipyards. Walia in examination-in-chief stated
that the vessel reached Sand-heads near Calcutta and
suffered from engine trouble and therefore could not reach
Calcutta Port. Walia further stated that the Port
Authorities did-not permit the vessel to enter the Port and
the vessel had to be towed to Vishakhapatnam for repair.
Walia then stated "the Hindustan Shipyard tried to repair
the ship but as the defendant No.1 did not give the
necessary funds the vessels could not be repaired
ultimately. In the meantime the Master of the vessel
and crew were not paid their wages for which they filed a
suit in the Andhra Pradesh High Court. Thereafter the vessel
and the cargo were sold." The engine and the boiler of the
vessel failed possibly because of non-repair and it was
not the liability of the Insurance Company to reimburse the
plaintiff for the loss of the goods because of failure of
the owner of the vehicle of incur expenses for repair of
the ship. Thereafter the High Court also noticed that after
the proceedings had been lodged by the Master and the crew
members in the Andhra Pradesh High Court for arrest and
sale of the vessel, the plaintiff had given the consent to
the sale of the carge. The High Court accordingly gave
further finding that "it is therefore futile for plaintiff
now to claim that the cargo was abandoned because of the
inability to salvage it without incurring expenses higher
than the value of the cargo itself." The High Court felt
that the failure to carry out repairs can by no stretch
of imagination be said to be the perils of the sea and
accordingly gave a finding that the trial judge
437
was in error in concluding that the plaintiff had
established that the loss of the cargo was due to perils of
the sea.
We have gone through the evidence on record including the
four cables mentioned earlier. We are in complete agreement
with the Division Bench of the High Court that the cables do
not show that sea water had entered the engine room and it
was not a case of loss of goods due to perils of the sea.
The Judges of High Court took the view that the expression
"warehouse to warehouse" in the policy merely denotes the
time during which the policy would remain in force and by no
stretch of imagination can be interpreted as covering each
and every risk. We are also in agreement with the Division
Bench of the High Court that expression "warehouse to
warehouse" merely indicates the period during which the
policy would remain in force and has nothing to do about the
type of the risk policy covered.
The policy remained a typical Marine Voyage Policy with
Institute Cargo Clauses (FPA) and in the absence of loss due
to perils of the sea, the Insurance Company was not liable.
We are also in agreement with the view of the High Court
that it was not a case of abandonment of the goods because
of the perils of the sea. We are also in agreement with the
view of the High Court that it was not a case of abandonment
of the goods. In fact the plaintiff gave the consent for
permitting the sale of cargo and to recover the value
thereof It. is axiomatic that the burden was on the
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plaintiff to prove the loss due to perils of the sea and on
the facts of the case, at no stage, such a burden was
shifted on Insurance Company to prove otherwise. Under
Section 2(a) of the Marine Insurance-Act 1963 (Act No.11 of
1963) (shortly stated the Act) a "contract of Marine
Insurance" means a contract of Marine Insurance as defined
by Section 3. Section 3 defines that a contract of Marine
Insurance is an agreement whereby the insurer undertakes to
indemnify the assured, in the manner and to the extent
thereby agreed, against marine losses, that is to say the
losses incidental to marine adventure. "Marine adventure"
is also defined in the Act under Section 2 and includes any
adventure where (i) any insurable property is exposed to
maritime perils; (ii) the earnings or acquisition of any
freight, passage money, commission, profit or other
pecuniary benefit, or the security for any advances, loans,
or disbursements is endangered by the exposure of insurable
property to maritime perils; (iii) any liability to a third
party may be incurred by the owner of, or other person
interested in or responsible for, insurable property by
reason of maritime perils. "Maritime perils" is again
defined in Section 2(e) and means the perils
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consequent on, or incidental to, the navigation of the sea,
that is to say perils of the seas, fire, war perils,
pirates, rovers, thieves, captures, seizures, restraints and
detainments of princes and peoples, jettisons, barratry and
any other perils which are either of the like kind of may be
designated by the policy. It is thus clear, after knowing
the fact, that we are dealing with a Marine Insurance Policy
with Institute Cargo Clauses (FPA) attached against the
Insurance Company , it is the duty of the plaintiff to prove
as a fact that the cargo was lost due to perils of the sea. Since the fi
nding of the High Court is that no sea water
entered in the engine room and the fact that the cargo was
intact even after the ship was towed to Vishakhapatnam
showed that no sea water entered the ship and, therefore,
the loss to the plaintiff was not on account of perils of
the sea and the suit of the plaintiff against the Insurance
Company i.e. defendant No. 4 was rightly dismissed by the
High Court.
We are now left with the appeal filed by M/s. United Salt
Works and Industries Ltd., who was defendant No.3 in the
suit. It is most unfortunate that though the trial court
framed issues but without any discussions gave findings on
those issues against defendant No.3. The High Court on the
cross-objections filed by the appellant took the view that
the cross-objections were not covered by the provisions of
Order 41 Rule 22, of the Code of Civil Procedure and also
took, the view that no case had been made out for granting
relief to defendant No. 3 inspite of the provisions
contained in Order 41 Rule 33 of the Code of Civil
Procedure.
It will be noticed that apart from the fact that defendant
No.3 was merely the seller of the salt to the plaintiff and
had introduced defendant No.2 to the plaintiff, he had no
other role in the actual carriage of the goods by the ship
concerned. the plaintiff was dealing itself directly with
defendant No.2. The plaintiff directly paid the freight of
the voyage to defendant No.2. The plaintiff took the Bill of
Lading in its own name itself. Thus there was no cause of
action whatsoever against defendant No.3, yet the trial
court without any discussions, decreed the suit against
defendant No.3 alongwith the decree against defendants 1,
2 & 4.
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We are in agreement with the High Court that the cross-
objections filed by defendant No.4 against the plaintiff
were not maintainable. However, we are not in agreement
with the High Court that the provisions of Order 41 Rule 33
of the Code of Civil Procedure were not applicable. The
High Court
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noticed the decisions of this Court in Choudhary Sadu (dead)
by L.Rs. v. State of Bihar, AIR 1982 S.C. 98 and Mahant
Dhangir and another v. Shri Madan Mohan and others, AIR 1988
S.C. 54 but felt that it could not grant relief to defendant
No.3. In the Constitution Bench decision of this Court in
Pannalal v. State of Bombay and others, [1964] 1 S.C.R. 980
the facts were that the appellant therein had brought three
suits claiming full payment with interest in respect of
three hospitals constructed by him in execution of three
separate contracts. The trial court decreed the suits for
part of his claim against the State of Madhya Pradesh and
held that other defendants were not liable, and accordingly
dismissed the suits against them. On appeals preferred by
the State of Madhya Pradesh the High Court set aside the
decree against the State Government and allowed the appeals
with costs. The plaintiff at that stage prayed for leave of
the High Court to file a cross objection and also for
decrees to be passed against the Deputy Commissioner under
Order 41 Rule 33 of the Code of Civil Procedure, which was
rejected and all the suits were dismissed. It was inter
alia urged that the High Court ought to have granted relief
against such of the other defendants as it thought fit under
Order 41 Rule 33 of the Code of Civil Procedure. This Court
held that the wide wording of Order 41 Rule 33 empowers the
appellate court to make whatever order it thinks fit, not
only as between the appellants and the respondent but also
as between a respondent and a respondent. In could not be
said that if a party who could have filed a cross-objection
under Order 41 Rule 22 did not do so, the appeal court could
under no circumstances give him relief under the provisions
of Order 41 Rule 33. Order 41 Rule 22 permits as a general
rule, respondent to prefer an objection directed only
against the appellant and it is only in exceptional cases
that an objection under Order 41 Rule 22 can be directed
against the other respondents. On the facts of these cases
the High Court refused to exercise its powers under Order 41
Rule 33 on an incorrect rule of the law and so the appeal
must be remanded to the High Court for decision what relief
should be granted to the plaintiff under Order 41 Rule 33 of
the Code of Civil Procedure.
The Provisions of Order 41 Rule dealing with the power the
appellate court of grant relief to parties to suit who have
not appealed or filed cross-objections came up for
consideration before this Court in Giani Ram and others v.
Ramji Lal and others, [1969] 3 SCR 944. The facts of that
case may be noticed. Under the Punjab customary law the
female heirs were not entitled to challenge a sale of
ancestral property by a male owner. The father sold
property in 1916 without legal necessity. Son filed suit in
1920
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and obtained a declaratory decree that the sale would not
enure beyond the life-time of his father. In the meantime
in 1956 Hindu Succession Act, 1956 came into force giving
equal rights to females and the daughters and widows were
also recognised as the heirs. Father died in 1959 and the
question arose of the right of the family to sue for
possession of the alienated property from the purchaser on
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the basis of the decree obtained by son. After the death of
the father, the three sons,- the widow and the daughters
filed a suit for possession of the alienates land on the
basis of the decree obtained by the son in 1920. Under
Section 8 of the Punjab Custom (Power to Contest) Act 1 of
1920 only those competent to contest an alienation could
take advantage of a decree obtained by a reversioner. The
trial court passed a decree for a half share of the suit
property in favour of the son only, holding that the female
heirs of the alienor were not entitled to take advantage of
the decree passed in the suit in 1920. The District Court
modified the decree by decreeing the suit in respect of the
whole property in favour of the son. In second appeal the
High Court restored the decree of the trial court holding
that the claim of the female heirs of the alienor could not
be upheld, firstly because of the Punjab customary law and
Section 8 of Punjab Custom (Power to Contest) Act 1 of 1920
and secondly because they had not filed any appeals against
the order of the lower courts. In appeals by special leave
before this Court it was held by Shah, J. (i) that the
preliminary objections raised by the alienees that the suit
in its entirety should have been dismissed because by the
enactment of the Hindu Succession Act father was deemed to
be a full owner and notwithstanding the decree of 1920 his
son had after that Act no subsisting reversionary interest
in the property, must stand rejected. There is nothing in
the Hindu Succession Act which retrospectively enlarges the
power of a holder of ancestral land or nullifies a decree
passed before the Act; (ii) under the customary law of
Punjab the wife and the daughter of a holder of ancestral
property could not sue to obtain a declaration that the
alienation of ancestral property will not bind the
reversioners after the death of the alienor. But a
declaratory decree obtained in a suit instituted by a
reversioner competent to sue has the affect of restoring the
property alienated to the estate of the alienors. This
Court took the view that the effect of the declaratory
decree in the suit filed by the son in 1920 was merely to
declare that by the sale, the interest conveyed .4 to the
alienee was to enure during the life-time of the alienor.
The conclusion was therefore inevitable that the property
alienated reverted to the estate of the father at the point
of the death and all persons who would,
441
but for the alienation have taken the estate were entitled
to inherit the same. If the father had died before the
Hindu Succession Act, 1956 was enacted the three sons would
have taken the estate to the exclusion of the widow and the
two daughters. After the enactment of the Hindu Succession
Act the estate devolved upon the three sons, the widow and
the two daughters. It was further held that the High Court
was therefore in error in holding that because in the year
1920 the wife and daughters of the alienor were incompetent
to challenge the alienation of ancestral property by the
father, they could not, after the enactment of the Hindu
Succession Act inherit the estate when succession opened
after that Act came to force. This Court further held that
the High Court was equally in error in holding that because
the widow and daughters had not filed an appeal or cross-ob-
jection against the decree of the lower courts, they were
not entitled to any relief. The sons, the daughters and the
widow of the alienor had filed the suit for a decree for
possession of the entire property and their claim was that
the alienee had no subsisting interest. The District Court
accepted that claim and granted a decree in favour of the
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three sons for the entire property which was alienated. If
the alienees were unable to convince the court that they had
any subsisting interest in the property in dispute after the
death of the alienor the court was competent under Order 41
Rule 33 of the Code of Civil Procedure to adjust the rights
between the sons, the daughters and the widows of the
alienor in that property. In Order 41 Rule 33 the
expression "which ought to have been passed" means "what
ought in law to have been passed". If the appellate Court
is of the view that any decree which ought in law to have
been passed was in fact not passed by the subordinate court,
it may pass or make such further or other decree or order as
the justice of the case may require.
It may be noticed that in that case no first appeal or even
the second appeal was filed on behalf of the daughters and
the widow yet this Court thought it fit to grant them relief
under Order 41 Rule 33 of the Code of Civil Procedure.
The decision in the case of Pannalal v. State of Bombay,
(supra) was followed by this Court in Mahant Dhangir and
another v. Madan Mohan and others, [1987] (Supp) S.C.C. 528
= AIR 1988 S.C. 54.
If the relief can be granted by the appellate court even
when no appeal or cross-objections were filed by the
respondent, surely relief can be granted by the appellate
court when cross-objections have been filed by
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the respondent against a co-respondent. Order 41 Rule 33 of
the Code of Civil Procedure reads as under:-
"33. Power of Court of Appeal The Appellate
Court shall have power to pass any decree and
make any order which ought to have been passed
or make and to pass or made such further or
other decree or order as the case may require,
and this power may be exercised by the Court
notwithstanding that the appeal is as to part
only of the decree and may be exercise in
favour of all or any of the respondents or
parties, although such respondents or parties
may not have filed any appeal or objection and
may, where there have been decrees in cross-
suits or where two or more decrees are passed
in one suit, be exercised in respect of all or
any of the decrees, although an appeal may not
have been filed against such decrees."
(emphasis added)
Really speaking the Rule is in three parts. The first part
confers on the appellate court very wide powers to pass such
orders in appeal as the case may require. The second part
contemplates that this wide power will be exercised by the
appellate court notwithstanding that the appeal is as to
part only of the decree and may be exercised in favour of
all or any of the respondents or parties, although such
respondents or parties may not have filed any appeal or
objection. The third part is where there have been decrees
in cross-suits or where two or more decrees are passed in
one suit, this power is directed to be exercised in respect
of all or any of the decrees, although an appeal may not
have been filed against such decrees.
The present case falls within the third part of Rule 33 of
Order 41 of the Code of Civil Procedure.
We are of the view that on the facts and circumstances of
this case it was a fit case for the High Court to have
exercised power under Order 41 Rule 33 to set aside the
decree passed by the trial court against defendant No.3
without having discussed any issue against defendant No.3
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and to decide the case itself. We also thought of remanding
back the matter to the High Court but we find that the facts
are simple and lie in narrow compass and show total non-
liability of defendant No.3 to the claim put
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forward by the plaintiff against it. As we have noticed
earlier no cause of action is established against defendant
No.3 who merely sold salt to the plaintiff and introduced
defendant No.2, the Charter Party to the plaintiff. The
plaintiff thereafter directly dealt with defendant No.2 by
paying the freight to defendant No.2 and by obtaining the
Bill of Lading in its own name. The property in goods had
already passed on to the plaintiff before it obtained the
Bill of Lading.
The result is that Civil Appeal No. 4611 of 1992 is
dismissed and Civil Appeal No. 4612 of 1992 is accepted and
suit of the plaintiff filed against defendant No.3 is
dismissed. The judgments of the trial court and High Court
are modified further to the extent that the suit against
defendant No.3 is also dismissed. In both the appeals the
parties are left to bear their own costs.
V.M. CA No. 4611/92-dismissed
CA No. 4612/92-allowed.
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