1998 (12) TMI 637 - HC - Indian Laws

Summary

Issues Involved:
1. Maintainability of the suit by the plaintiffs.
2. Proof of shortage and damages.
3. Entitlement of the plaintiffs to sue based on the bill of lading and subrogation.
4. Liability of the defendants, including the agent's liability.
5. Validity and interpretation of the bill of lading as evidence.

Issue-wise Detailed Analysis:

1. Maintainability of the Suit by the Plaintiffs:
The trial court dismissed the suit on the grounds that the plaintiffs failed to prove the alleged shortage and that the 2nd plaintiff had not obtained any title over the goods. The court also found that the 1st plaintiff, as the insurer, could not enforce any claim against the defendants based on the subrogation letter. However, on appeal, it was argued that the 2nd plaintiff was indeed an allottee from the Cashew Corporation of India (CCI), supported by documentary evidence such as the letter of allotment (Ext. A-3), letter of acceptance (Ext. A-4), and the certificate of sale value receipt (Ext. A-5). The appellate court found that the trial court erred in its assumption and held that the 2nd plaintiff was an allottee and thus had the right to maintain the suit.

2. Proof of Shortage and Damages:
The trial court dismissed the suit, stating that the plaintiffs did not succeed in proving the alleged shortage. The court noted that the witnesses examined were not present at Dar-Es-Salaam to verify the condition of the packing and the actual weight of the goods loaded. However, the appellate court found that the bill of lading (Ext. B-1) stamped with "Shipped on Board" indicated that the weight was checked and found correct, thus shifting the burden of proof to the defendants. The appellate court held that the defendants failed to provide satisfactory rebutting evidence and that the plaintiffs had established a prima facie case of shortage based on the survey report (Ext. A-8).

3. Entitlement of the Plaintiffs to Sue Based on the Bill of Lading and Subrogation:
The trial court held that the 2nd plaintiff was not an endorsee of the bill of lading and thus could not maintain the suit. However, the appellate court clarified the significance of "endorsement in blank," which allows the bill of lading to pass from hand to hand by mere delivery. The court cited Section 1 of the Indian Bills of Lading Act, 1856, which transfers all rights of suit to the endorsee. The 2nd plaintiff, being the endorsee, and the 1st plaintiff, as the subrogated insurer, were entitled to sue the defendants for recovery of damages.

4. Liability of the Defendants, Including the Agent's Liability:
The appellate court found that the 3rd defendant acted only as the agent of the 2nd defendant and thus could not be held individually liable. The liability of the 3rd defendant was restricted to that of an agent. The court also held that the defendants were responsible for the shortage and damages as they failed to deliver the consignment in the same good order and condition in which it was entrusted to them.

5. Validity and Interpretation of the Bill of Lading as Evidence:
The trial court held that the bill of lading (Ext. B-1) was not conclusive evidence of the weight and condition of the goods shipped. However, the appellate court disagreed, stating that the bill of lading stamped with "Shipped on Board" served as strong prima facie evidence of the shipment's weight and condition. The court cited legal precedents to support the view that the statements in the bill of lading regarding the number of bags shipped were conclusive unless satisfactorily rebutted by the defendants. The appellate court held that the plaintiffs were entitled to rely on the bill of lading and that the defendants failed to disprove the plaintiffs' claims.

Conclusion:
The appellate court allowed the appeal, set aside the trial court's judgment and decree, and granted a decree for the amount claimed in the plaint with interest at 6% per annum from the date of the suit in favor of the 1st plaintiff against the defendants. The liability of the 3rd defendant was restricted to that of an agent of the 2nd defendant. The plaintiffs were also awarded costs in both the appellate and trial courts. The court rejected the oral submission for leave to appeal to the Supreme Court, stating that the case did not involve any substantial questions of law of general importance.