ABDUL RAHIM KAZI, J.- This suit has been filed by the Plaintiffs for recovery of Rs. 92,765.43.
2. Briefly the facts are that Messers. Faruq Silk Mills had imported a consignment of 11,070 Kgs of nylon yarn, Export Quality, packed in 650 cartons, hereinafter referred to as the consignment, from the United Kingdom per vessel s.s. STRATHINCH' deliverable at Karachi. The Defendants No. 1 and 2 are the owners/charterers of the said vessel and their local agents in Pakistan respectively. The said consignment was delivered to Defendant No. 1 in good order and condition at the Port of Middlesbrough and the Defendant No. 1 after satisfying themselves about the quality and quantity of the consignment issued Bill of Lading. The said consignment was insured with the present plaintiffs under Marine Policy No. RB/KM/3564/9/76 in the sum of Rs. 4,50,000/-. The consignee appointed M/s Rizco as their clearing agents. The vessel arrived at the outer anchor of Karachi Port on or about 17-8-1976 and unloaded her cargo including consignment in suit into barges hired/employed by Defendants No. 1 and 2 including Barge No. 571. It is also the case of the Plaintiffs that 221 cartons out of the consignment in suit were unloaded in Barge No. 571 which on her way to the landing berth caught fire on 20-8-1976 on account of being unseaworth and due to negligence/want of due and proper care/misconduct of the crew for which the Defendants are liable jointly and severally. During attempt to extinguish the said fire and water used therefor, the said 221 cartons of the consignment were damaged and thus the consignee suffered heavy losses and on knowledge of such loss, they immediately informed Defendant No. 2 and the plaintiffs and requested for survey and assessm ent of loss. The Plaintiffs appointed their surveyor while the Defendants also appointed their surveyor and the survey of the damaged cotton was carried out and it was found that 105 cartons had become a total loss and out of remaining 116 cartons 533 cones were damaged to the extent of 62,22% and 371 cones were damaged to the extent of 44.44% while 488 cones to the extent of 22.22%. Also of said damage, the consignee suffered loss of Rs.
1,02,277.27 as assessed by the surveyors and lodged the claim with Defendant No. 2 and also on the Plaintiffs. Defendant No. 2 failed to pay the claim which the Plaintiffs settled in discharge of their contract/obligation by paying Rs.92,765.43 and obtained sagrogation to all rights and remedies of consignee. The Plaintiffs, therefore, lodged the claim of Defendants which they failed to pay inspite of demands and legal notice and, therefore, this suit was filed by the Plaintiffs.
3. The Defendants filed their written statement wherein they denied their liability. Their contention is that they are exempt from meeting with the claim of the Plaintiffs as the lire had taken place accidently and they were protected under Article III and IV of the Schedule to Carriage of Goods By Sea Act 1925. It was also pleaded that they had appointed Messers. Joseph Lobo to servey the goods. A. Further plea was taken that the consignee being an unregistered Firm had no right to sue and, therefore, the subrogee/Plaintiffs also suffered from the same disability.
4. On these pleadings of the parties, the following issues were settled;
(i) Are the Plaintiff entitled to sue the Defendants?
(ii) What was the extent of loss caused by fire to the consignment in suit?
(iii) Whether the fire was caused due to unseaworthiness of the Barge in question?
(iv) Are the Defendants liable as carriers and/or as Bailee of the goods in suit for the alleged loss by fire?
(v) Reliefs.
The Plaintiffs examined Muhammad Khalid Ikram, their Executive Officer while the Defendants filed affidavits in evidence of their witnesses, Sardar Muhammad Amin and Dawood who were cross- examined.
5. I have heard the arguments of the learned counsel for the parties and my finding on the issue are as under; ISSUE No. 1.
6. The burden of this issue is on the Plaintiffs. Mr. Ibrahim Pishori, the learned counsel for Defendants has submitted that the original consignee Faruq Silk Mills are an unregistered partnership firm and, therefore, they are not competent to file the suit in their name against the defendants by virtue of the provisions of section 69 of the Partnership Act. He has further submitted that being under a disability to file a suit the consignee could not assign or transfer their right to sue to the insurers. He has referred to the provisions of section 69 of the Partnership Act as well as section 135-A of the Transfer of Property Act. He has further submitted that instead of specific plea taken in Para-13 of the written statement, the Plaintiffs have failed to produce any evidence on this point. From this the learned counsel has submitted that the present suit is not maintainable in law and is liable to be dismissed.
7. As against this Mr. Muhammad Ashraf Bhatti, the learned counsel for Plainfiffs has submitted that in the present case the consignment was insured with the Plaintiffs and the rights of the consignee stands assigned to the Plaintiffs under the letter of subrogation. He has referred to the Insurance Policy produced as Ext. 5/1 and also letter of subrogation as Ext. 5/7. Mr. Ashraf Bhatti, Advocate has also placed reliance on section 135-A of the Transfer of Property Act and has cited a number of cases of the Hon'ble Supreme Court as well as the High Courts.
8. I have considered the above submissions of the learned counsel for the parties. No doubt section 69(2) of the Partnership Act renders the unregistered firm disabled from filing of the suit to enforce a right arising out of a contract in a Court of law. The sub-section (2) read as under; "69. Effect of non-registration.(1)......... (2) . No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm.
(3) The assignment of such rights is made to insurers under the provisions of section 135 (A) of the Transfer of Property Act, which is called the subrogation. The provisions of section 135-A of the Transfer of Property Act read as under;
135. A. Assignment of rights under polio? Of marine insurance:-( 1) Where a policy of marine insurance has been assigned so as to pass the beneficial interest therein the assignee of the policy is entitled to sue thereon in his own name; and the defendant is entitled to make any defence arising out of the contract which he would have been entitled to make if the action had been brought in the name of the person by or on behalf of whom the policy was effected.
(2) Where the insurance pays for a total loss, either of the whole, or in the case of goods, of any apportionable part, of the subject-matter insured, he thereupon becomes entitled to take over the interest of the insured person in whatever may remain of the subject-matter so paid for, and he is thereby subrogated to all rights and remedies of the insured person in and in respect of that subject-matter as from the time of the casualty causing the loss.
(3) Where the insurer pays for a partial loss, he acquires no title to the subject-matter insured, or such part of it as may remain, but he is thereupon subrogated to all rights and remedies of the insured person as from the time of the casualty causing the loss insofar as the insured person has been indemnified by such payment for the loss.
(4) Nothing in clause (e) of section 6 shall effect the provisions of this section."
Of course the above provisions show that in case of assignment of Marine Policy, all the beneficial interests therein are assigned alongwith the right to sue. Of course in normal course, the person can transfer or assign only those rights which accrue to him. As argued by Mr. Ibrahim Pishori, Advocate for Defendants it appears that, as the consignee himself was under a disability under section 69 of the Partnership Act, they could not transfer such right to sue by assignment to the insurer. However, a right of assignment, therefore by surbrogated does not contain only the assignment of right to sue but also the assignment of right in the property with all the beneficial interest. A further perusal of sub-section (2) of section 135-A of the Transfer of Property Act would show that in case of subrogation the insurer does not only make good the loss suffered by the assured but he is also entitled to the remedies of the subject matter for which he has indemnified and assured. Hence it is an independent right that accrued to the subrogee. Subrogation has been dealt with in the case of EAST & WEST STEAMSHIP CO Vs QUEENSLAND INSURANCE CO. (P.L.D. 1963 S.C.
663) wherein it is held as under; "Subrogation is after all a right of substitution. The right as well as the remedy gets transferred to the subrogee by operation of law. Why should such a person be held debarred from enforcing the remedy in his own name."
Also in the case of COMPANTA COLUMBIANA DE SEGUROS vs PACIFIC STEAM NAVIGATION CO. 096411 ALL ER 216). It has been held as under; "Notwithstanding the rule that a bare right of litigation was not assignable, rights of action for breach of contract or in tort could be the subject of a valid legal assignment in cases where, before the Supreme Court of Judicature Act, 1873, equity would have compelled the assignor to exercise his rights against the contract breaker or tortfeasor for the benefit of the assignee.
(ii) Accordingly, an assignment by an assured to his insurer of the assured's rights against the contract breaker or tortfeasor rendered the rights assigned enforceable by the insurer in his own name and thus the insurer in the present case were entitled, as assignees to enforce the consignee's right of action in the insurere's own name."
Similarly, in the case of JAMES NELSON & SONS LTD vs NELSON LINE (LIVERPOOL 1 LTD (1906) 2 KB 217 CA, it has been held by their Lordships as under; "What is the nature of their right by way of subrogation? It is the right to stand in the shoes of the persons whom they have indemnified, and to put enforce the right of action of those persons; but it remains the Plaintiffs right of action, although the under-writers are entitled to deduct from any sum recovered the amount to which they have indemnified the Plaintiffs, and although they may have provided the means of conducting the action to a termination."
In view of the above discussion, I am of the view that by virtue of subrogation it is not only the right to sue that passes to the casualty causing the loss in so far as the insured person has been indemnified by such payment for the loss.
(4) Nothing in clause (e) of section 6 shall effect the provisions of this section."
Of course the above provisions show that in case of assignment of Marine Policy, all the beneficial interests therein are assigned alongwith the right to sue. Of course in normal course, the person can transfer or assign only those rights which accrue to him. As argued by Mr. Ibrahim Pishori, Advocate for Defendants it appears that, as the consignee himself was under a disability under section 69 of the Partnership Act, they could not transfer such right to sue by assignment to the insurer. However, a right of assignment, therefore by surbrogated does not contain only the assignment of right to sue but also the assignment of right in the property with all the beneficial interest. A further perusal of sub-section (2) of section 135-A of the Transfer of Property Act would show that in case of subrogation the insurer does not only make good the loss suffered by the assured but he is also entitled to the remedies of the subject matter for which he has indemnified and assured. Hence it is an independent right that accrued to the subrogee. Subrogation has been dealt with in the case of EAST & WEST STEAMSHIP CO Vs. QUEENSLAND INSURANCE CO. (P.L.D. 1963 S.C.
663).
Wherein it is held as under: "Subrogation is after all a right of substitution. The right as well as the remedy gets transferred to the subrogee by operation of law. Why should such a person be held debarred from enforcing the remedy in his own name."
Also in the case of COMPANTA COLUMBIANA D1 SEGUROUS Vs. PACIFIC STEAM NAVIGATION CO. (1964)
I ALL ER 216). It has been held as under: "Notwithstanding the rule that a bare right of litigation was not assignable, rights of action for breach of contract or in tort could be the subject of a valid legal assignment in cases where, before the Supreme Court of Judicature Act, 1873, equity would have compelled the assignor to exercise his rights against the contract breaker or tortfeasor for the benefit of the assignee.
(ii). Accordingly, an assignment by an assured to his insurer of the assured's rights against the contract breaker or tortfeasor rendered the rights assigned enforceable by the insurer in his own name and thus the insurer in the present case were entitled, as assignees to then force the consignee's right of action in the insurere's own name."
Similarly, in the case of JAMES NELSON & SONS LTD Vs. NELSON LINE (LIVERPOOL) LTD (1906) 2 KB 217 CA, it has been held by their lordships as under: "What is the nature of their right by way of subrogation? It is the right to stand in the shoes of the persons whom they have indemnified, and to put enforce the right of action of those persons; but it remains the Plaintiffs right of action, although the under-writers are entitled to deduct from any sum recovered the amount to which they have indemnified the plaintiffs, and although they may insurers but also all rights and remedies of the assured with regard to subject-matter would also pass to the subrogee for which the subrogation has been effected. Accordingly, I answer this issue in affirmative and hold that the suit is aintainable.
ISSUE No.2:
9. Mr. Ibrahim Pishori, the learned counsel for Defendants has submitted that the onus is on the plaintiffs to prove the extent of the loss suffered by them; and that they have failed to prove the same. As far as the facts pertaining to discharge of carge in Barge No. 571 and its catching fire on 20-8-1976 are concerned, the same stands admitted. It is also admitted that the consignment was damaged. However, the question involved is as to what was the extent of damage and loss suffered by the consignee. The Plaintiffs have put reliance on the Survey Report (Ext. 5/5) carried out by Siraj D.S. Jamall & Co. On 6-10-1976 and 22-10- 1976. This report shows the extent of the damage caused to the consignee. The report also shows that the survey was. Carried out in presence of Carrier's surveyor Mess. Joseph Lobo & Co. The other report on the record is that of surveyor M/s Joseph Lobo and Company as Ext 5/6. This report also shows that cause of damage was by fire and also further by rain fall on August 22, 24, 27, 30 and 31 of 1976. This report also shows the extent of damage caused to the consignment. Mr. Ibrahim Pishori, Advocate has raised objection that none of the two surveyors was examined in Court and, therefore, these two reports do not stand proved. It may be observed that it is the case of the Plaintiffs that the consignee had lodged a claim of Plaintiffs as well as Defendants and had also asked for survey of the damaged consignment; and that the Plaintiff had appointed Messrs. Siraj D.S. Jamall and Co. While the Defendants had appointed Messrs. Hoseph Lobo & Co. As their surveyors. The Defendants in Para-11 of their written statement have also admitted that they had appointed Messrs. Joseph Lobo to survey the alleged damaged goods. The report shows that the survey had taken place in presence of both the surveyors on 6th October, 1976 onwards. In these circumstances it is not open to the Defendants to challenge the Survey Report. However, it was also for the Defendants, if the assessed losses ascertained by the surveyor were lesser to have examined their surveyor in proof of the case. There being no evidence to the contrary, I am of the view that this issue stands proved by the Plaintiffs and the loss suffered by the consignee as mentioned in the Survey Reports amounts to Rs.
1,02,277.27.
10. Mr. Ibrahim Pishori, the learned counsel for Defendants has submitted that admittedly the loss and damage is caused on account of fire and, therefore, the Defendants are protected under the provisions of rule 2(b) & (q) of Article IV of the Schedule to the Carriage of Goods by Sea Act, 1925. It will be pertinent to reproduce the two clauses which read as under; "2. Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from-
(a) (b) fire, unless caused by the actual fault or privity of the carrier.
(c) ............
(d) ...........
(e) ...........
(f)............
(g)
(h) to(p)................................... (q) any other cause arising without the actual fault or privity of the carrier, or without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damages."
From this the learned counsel has submitted that since it was a case of fire it comes under Exception; and that burden lies on the Plaintiffs to prove that the said loss and damage was caused on account of negligence of the Carrier; and that the present Plaintiffs have failed to prove the same.
11. As against this Mr. Muhammad Ashraf Bhatti, the learned counsel for Plaintiffs has submitted that the goods at the time the fire occurred were in the barge hired by the Defendants and, therefore, the same can be said to be under bailment and the Defendants being the bailees would be responsible for any loss and damage caused to the goods if the same was on account of negligence on their part. He has submitted that it was for the bailess/Defendants to have taken all pre-cautions for the safe delivery of the goods at the Port. Reference has been made to the Fire Report of the Karachi Port Trust which has been produced as Ext. 6/2. This report is dated 21-8-1976 and the report shows that the consideration was given to two reasons for determining the cause of fire which are;
(i) Spontaneous Combustion.
(ii) Smoking and Sparks from the Ship's funnel.
In the same. Report the first ground was ruled out but as regards the second ground it was observed "smoking or sparks from the ship's funnel as the cause must receive serious consideration due to the fact that the Dock Labour was employed loading the cargo in the barge and it is quite possible that some one might have thrown burning cigarettes end and sensitive fibre caught fire or a cigarette might have been thrown from the Ship's deck carelessly which settled in the interior of the cargo and caused fire. The possibility of falling sparks from the ship funnel is also one of the factor for consideration as in the past many fires have been caused by the sparks in hazardous cargo like cotton etc. The type of cargo loaded in the barge was no less hazardous than cotton and sparks are liable to cause fire." From the above report which is produced by the Defendants themselves it is apparent that the fire was caused either by the throwing of burning cigarette or the sparks from the funnell of ships; and that this was not the first time that the fire was occurred of this reasons. The cargo being nylon ryan in the present case it was incumbent upon the Defendants to have taken proper care and caution In view of this report it appears that the Defendants have been negligent. Mr. Ibrahim Pishori, Advocate has relied on the case of MUHAMMADI STEAMSHIP CO. LTD vs M/s A.R. MUHAMMED SADIQ & ANOTHER (1980 S.C.M.R. 432). In this case their Lordships while dealing with the exception under Articles 3 and 4 of the Schedule to Carriage of Goods by Sea Act, 1925 have held as under; The carrier has to prove exception whenever loss of or damage to cargo is proved to have taken place after shipment and before delivery to the consignee, and the burden of proving negligence to defeat it is on the shipper or consignee." Once it is proved that the cargo was delivered damaged after shipment during the voyage, the onus shifted on the carriers to bring the cause of damage within the exception provided in Article IV of the said enactment. In case the carrier is able to bring the case within the immunities specified in the said Article it would be for the shipper to prove that damage was caused by the negligence of the carrier." in East and West Shipment Company Co. Vs Hossin Brothers & others. This Court had the occasion to consider the same very question and hold that "once the goods are loaded on the ship owner can free himself from the obligation by bringing himself within the exception mentioned in Article IV. Rules 2 of Article III is directed to be manner in which the obligations entered into are to be carred out. No doubt, rule 2 (d) of Article III is subject to Article IV. But exceptions mentioned in Article IV do not cover a case of failure to discharge the goods "properly and dare fully" hence, the exception clause will not protect the ship owners against the consequences of negligence."
In this view of the matter and in view of the above discussion, I have no hesitation to hold that there was element of negligence by the Defendants in discharge of the cargo in the present case. These issues are, therefore, answered in favour of the Plaintiffs.
ISSUE NO. 5:
12. In view of the above discussion I hold the Defendants liable to pay the loss and damage indemnified by the Plaintiffs and decree the suit of the Plaintiffs for Rs. 92,765.43 with mark-up at the rate of 14% from the date of institution of suit till payment and costs.