1. ' By order dated 22-4-1999, I had decreed Suit No,577 of 1993 against defendants Nos.1 and 2 had dismissed it as against defendant No,3. However, I had stated at the time that the decretal amount would be announced at the time of announcing the detailed order. Since the points of law involved in this suit are similar to these in Suit No,577 of 1993, in which I had reserved judgment, this common judgment will now dispose of both these suits. The facts of the two suits being somewhat different, though port of shipment in both cases is the same that is in China, I have treated the two suits separately wherever necessary, but the discussion on limitation of liability and the conclusion have been joined together. Following are the detailed orders.
2. ' Suit No,1159 of 1990.
3. ' Brief facts of the case as brought out in the plaint are that the Messrs Galaxy Textile Mills Limited of Jhang imported a consignment of textile machinery under bill of lading No,150 dated 27-11-1989 on board a vessel MV QUA Jhang from the port of Xingang in China. Upon the vessel's arrival at Karachi on 25-12-1989 the consignment wed found to be short by one case. This was reflected in the preliminary outturn report and was subsequently, confirmed by a short landing report issued by the defendant No,3. The importer lodged his claim against the plaintiff with whom the said consignment was insured and the plaintiff paid the importers claim of Rs,5,17,628 and were subrogatcd to the rights of the importers. The importers then lodged a claim against the defendant No,1 in their capacity as the carrier of the consignment and defendant No,2 as the agent of the carrier and also as the custom agent who entered the vessel in port of Karachi. Since this claim was not paid by the defendants, the plaintiffs as the subrogee of the importers filed this suit for recovery of the amount paid by them to the consignee.
4. ' The defendant No,2 have filed a written statement wherein the defendant No,2 denies that he is the agent of defendant No,1. However, he does admit that he was the custom agent who entered the vessel in. The defendant No,2 also denies that the consignment was short landed and instead says that the entire consignment was landed into the custody of KPT the defendant No,3. The defendant No,2 further contends that since only one case has been allegedly short landed, the defendants are entitled to limit their liability per package which according to them, comes to only RMV 700. The defendant No,2 also denies the plaintiffs' right to sue and question their right to subrogation. In so far as the defendant No,3 is concerned they state and confirm that one case out of the said consignment was short landed but they deny any liability for such short landing as they say that they have no contractual relationship with either of the parties to this suit.
5. ' Based on the pleadings of the parties the following issues were framed:--
(1) Whether the defendant No,1 as carrier accepted to carry by sea from port of Xingang to Karachi, the goods imported by Galaxy Textile Mills Ltd., under bill of lading No,150 dated 27-11-1989?
(2) Whether the aforesaid consignment of goods discharged at Karachi Port on or about 25-12- 1989, after having been brought by vessel MV QUA Jiang of defendant No,1 was found short of one case?
(3) Whether the goods found short were detained or misappropriated by the defendant No,1?
(4) Whether the defendants Nos.1 and 2 jointly and severally are liable for the short landed goods?
(5) Whether the plaintiff reimbursed importer Messrs Galaxy Textile Mills Ltd., for the short landed goods, by paying them Rs,5,17,628 as insurers and obtained letter of subrogation dated 2-12-1990?
(6) Whether the entire consignment of goods including the goods found short, were handed over by the defendant No,1 to the defendant No,3 as bailee?
(7) Whether the suit is time-barred?
(8) Whether the suit is not maintainable?
(9) Whether the defendant No,1 is not a necessary party?
(10) What should the decree be?
6. ' The plaintiffs examined a number of witnesses. Their first witness was an employee of the plaintiffs' company, who produced the various documents that the plaintiffs rely on. The P.W.2 was the Assistant Traffic Manager K.P.T., who produced the Out Turn Report in respect of the said vessel and their other documents to show the short landing. P.W.3 was the surveyor firm which carried out the survey and he gave the evidence to confirm the short landing. P.W.4 was the agent of the importers, who produced the invoice to show the value of the consignment. P.W.5 was an employee of the plaintiffs' company, who proved various documents annexed to the plaint.
7. However, no evidence of any kind was led by the defendants.
8. ' My findings with regard to the issues are as under: ' Issue No, 1 . The defendant No,2 have denied that they are the agent of defendant No, 1 . The defendant No,1 themselves have not been represented. However, the defendant No,1 did write to the Court directly wherein they stated that they knew nothing of the short landing of this consignment.
9. They, however, needed some time to look into the matter and appear before the Court. This letter was received in the Court on 12-4-1992. In spite of the fact that almost 9 years have gone by nobody has appeared .On behalf of the defendant No, 1 . Letter itself Is an admission of the receipt of notice of the suit and hence it was the duty of the defendant No,1 to defend their claim or to file application to have their name struck off. Since they did neither, I have no option but to accept the evidence brought on record by the plaintiff with regard to this issue and, therefore, my findings with regard to this issue are in the affirmative.
10. ' Issue No,2. Considering that the plaintiffs have brought all the K.P.T. Documents on record to show that there has been a short landing of one case which has been confirmed by the witness of K.P.T., the defendant No,3. In the absence of any evidence to the contrary from the defendants, my findings with regard to this issue are in the affirmative.
11. ' Issue No,3. No evidence has been brought by the plaintiffs to show that the missing case was misappropriated, though of course evidence has been brought to show that the consignment was short landed by one case. Consequently, I find that the plaintiffs have proved that the consignment was short by one case.
12. ' Issue No,4. In so far as the defendant No,1 is concerned, the liability of defendant No,1 is in this capacity as the carrier and the liability of defendant No,2, as per established principle of shipping law, would be as per the provisions of section 55 of the Customs Act. Since the plaintiffs allegation that the defendant No,1 was the carrier has gone un rebutted by defendant No,1, I have no option but to accept the plaintiffs' contention that the defendant No,1 was indeed the carrier of the consignment. If that be so it is obvious that the defendant No,1 would be liable for the shortage of the consignment. However, I find that the defendant No,1 will be entitled to limit his liability which shall be discussed towards the end.
13. In so far as the liability of defendant No,2 is concerned as stated earlier his liability only arises under the provisions of section 55 of the Customs Act. I have already held in my judgment in Suit No,386 of 1982 that under the provisions of section 55 of the Customs Act, the liability of the agent is only a secondary liability, that is to say that the, liability of the agent is that of a guarantor and he only becomes liable if no recovery can be made from the defendant No,1. Consequently, my findings with regard to this issue are that the defendant No,1 is liable for short landing of one case but defendant No,2's liability is only a secondary liability.
14. ' Issue No,5. The plaintiffs have brought various documents on record to show that they have paid the claim of the importers for Rs,5,17,628 and that they obtained a letter of subrogation, dated 2-12- 1990 from the importers. In the absence of any proof to the contrary from the defendants, my findings with regard to this issue are in the affirmative.
15. ' Issue No,6. In so far as this issue is concerned, it is by now a well-known fact that all goods that are brought to Karachi by a ship are always landed into custody of defendant No,3 and so were these goods as has been admitted by the defendant No,3 in their evidence. However, the contention of the defendants in their written statement that the entire consignment had been landed and was not short landed has not been proved, consequently, I have no option but to accept the contention of the defendant No,3 and the plaintiffs that the consignment was indeed short landed by one case.
16. ' Issue No,7. There is no evidence to the effect that this suit is time-barred. I find this suit was filed within the period of limitation of one year for carriage of goods by sea.
17. ' Issue No,8. I do not see any reason why this suit is not maintainable. In any case, since no arguments have been advanced on this point, my findings in respect of this issue are in the affirmative.
18. ' Issue No,9. Whether defendant No,1 is a necessary party or not, the fact remains that the defendant No,1 has chosen to be absent even though they had knowledge of the fact that there was a suit proceeding against them. Their absence would, therefore, mean that the contentions of the plaintiffs have gone un rebutted, that is to say that defendant No,1 is carrier of the consignment and consequently will be a necessary party.
19. ' Suit No,577 of 1993.
20. ' Brief facts of the case as brought out in the plaint are that the Messrs Akram Industries limited, Lahore (hereinafter referred to as the said importers) imported 712 cases containing Textile Machinery under Bill of Lading No,162, dated 1-8-1992 on board the vessel "Kota Pusaka" from the Port of loading i,e, Xingang, China to Karachi. Upon arrival of the vessel at Karachi on 8-9-1992 one case was found to be short landed. This short landing was confirmed by the Karachi Port Trust by a short landing report. Since the consignment was insured with the plaintiffs upon claim being lodged in respect of the said case short landed the plaintiffs paid a sum of Rs,6,09,000 to the importers and thereby became subrogated to their rights. The plaintiffs have, therefore, filed this suit for recovery of the said amount of Rs,6,09,000 ' On the other hand the defendants state in their written statement that the entire consignment was discharged at Karachi in the same condition and quantity as it was loaded and that there was no short landing whatsoever. However, they state that one case out of the suit consignment became untraceable at port of Karachi but for that they were not responsible and in any case they offered to pay for the said case untraceable on the basis of per package limitation but the plaintiffs refused to accept the said offer.
21. ' Based on the pleadings of the parties following issues were framed:--
(1) What were the contents, quality, quantity and value of the goods at the time of shipment?
(2) Whether any part of the suit consignment was short landed ex the vessel?
(3) What is the extent and value of the loss if any suffered by the consignee'
(4) Have the plaintiffs paid the consignee's claim and have they any right to sue?
(5) What is the maximum liability if any of the defendants in respect of the alleged short landing of one case?
(6) What should the decree be?
22. ' The plaintiffs examined one witness, who produced all the documents that he relied upon in support of his claim. The defendants did not lead any evidence and closed their side. My findings with regard to the individual issues are as under:-- Issue No, 1 . Since the defendants had led no evidence in rebuttal, I have no option but to accept the plaintiffs' contention that the quality, quantity and value of the goods was as per the bill of lading, invoice and the shipping documents produced by the plaintiffs.
23. ' Issue No,2. The short landing of one case is certified by the Karachi Port Trust. Though the defendants maintain in their written statement that this case became untraceable while into the custody of Karachi Port Trust, the fact remains that they cannot account for one case. They have also not led any evidence to show that the said case was discharged into the custody of Karachi Port Trust. Under the circumstances, I hold that one case from the suit consignment was short landed by the defendant No,l's vessel.
24. Issue No,3. The discussion on this issue is irrelevant since as per law which shall be discussed subsequently, I find that the defendant No,1 are entitled to limit their liability. Nevertheless the fact remains that the plaintiffs had lodged a claim for a sum of Rs,6,09,000 in respect of said short landing and since this figure has not been rebutted by the defendants through leading of any evidence, the presumption would be that this is the loss that the plaintiffs suffered.
25. ' Issue No,4. The plaintiffs have brought sufficient documentary evidence on record to show that they have paid the importers claim and, thus, they are subrogated to the rights of the plaintiffs.
26. Consequently, they have a right to sue. My findings, therefore, in respect of this issue are in the affirmative.
27. Law Applicable and Limitation of Liability ' The defendant No,2 in Suit No,1159 of 1990 had taken the plea in their written statement that the defendants will be entitled to limit their liability per package as per Hague Rules. Nevertheless, the bill of lading is silent about the law applicable to the carriage of the said consignment from the port in China, In the plaint the plaintiffs have claimed the full amount of their loss and in support of their contentions the learned counsel for the plaintiffs contends that since there is no mention of any law being applicable in the bill of lading and since there is no evidence to this effect in so far as the defendants are concerned, the only logical conclusion to be drawn is that the carrier who brought the consignment was a common carrier and consequently his liability is unlimited and he is not entitled to limit his liability per package.
28. ' All bills of lading normally on their reverse side contain the terms and conditions of the agreement which invariably include a paramount clause that shows the law applicable to the contract of carriage. But in both these cases neither party has filed the reverse side of the Bill of Lading. What law is then applicable to this contract of carriage? Now it is well-established that law applicable to a contract of carriage is the law of Port of Shipment which these days the world over, incorporate the international conventions known as either the Hague Rules or Hague Visby Rules or the U.S.A.
29. Carriage of good by Sea Act, 1925 which too is in fact more or less identical to Hague Rules. The law of port shipment is applied to a contract of carriage by sea because while enforcing the international conventions through municipal legislation the countries make these conventions applicable to only outgoing cargoes, as it has been done in case of our Carriage of Goods by Sea Act, 1925. Now it is well-known that Hague Rules are applicable in China, but even if these were not known to be applicable, for deciding a case it will be necessary for a Court to apply some law. To say that under such circumstances the carrier will be treated as a common carrier is to close one's eyes to international nature of carriage of goods by sea and to the fact that by now practically every maritime nation is now signatory to the aforesaid international conventions. When, therefore, it is not known as to what law would be applicable to show which the burden will be always on the carrier, it will be logical and just to apply Pakistani law of carriage by sea, that is Carriage of Goods by Sea Act, 1925, which incorporates the Hague Rules, as if it was enacted in the country of port of shipment.
30. ' If then Carriage of Goods by Sea Act, 1925 is applicable to this contract it is obvious that the defendant No,1, the carrier, in the absence of any evidence being led to the contrary would be liable for short landing of one case.
31. ' The relevant article of the Carriage of Goods by Sea Act, 1925 which deals with per package limitation are Article IV (5) read with Article IX. These are reproduced below:-- ' Article IV(5). Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with goods in an amount exceeding 100 Pounds per package or unit or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading.
32. ' This declaration if embodied the bill of lading shall be prima facie evidence but shall not be binding or conclusive on the carrier.
33. ' By agreement between the carrier, master or agent of the carrier and the shipper another maximum amount that mentioned in this paragraph may be fixed, provided that such maximum shall not be less than the figure above named.
34. ' Neither the carrier nor the ship shall be responsible in any event for loss or damage to or in connection with goods if the nature or value thereof has been knowingly misstated by the shipper in the bill of lading."
35. ' Article IX. The monetary units mentioned in these Rules are to be taken to be gold value."
36. It is clear from the above provision that the only way per package limitation may not apply is if the value of the goods is declared in the Bill of Lading. Since it is not the plaintiffs case in both suits that the value of the goods is so declared I hold that per package limitation will be applicable in both these cases and the defendant No,1 in both cases will be entitled to limit their liability. The question now arises is to what amount can they limit their liability. In the case of the "Rosa S" in the British jurisdiction reported in 1989 AER 489 it has been held that where Hague Rules are applicable to carriage, the combined effect of \Article IV, rule 5 and Article IX would be that the limit of carriers liability would be 100 Pounds sterling gold value, which would be the value of 732.238 grams of fine gold (22 carat gold) at the date of delivery of the cargo. I am in respectful agreement with the view except that `where the municipal legislation of the country of port of shipment declares the limit of liability to be any other figure it is that which will be applicable by the burden of showing that some other figure is applicable will be on the carrier. It may be noted that in cases where Hague Visby Rules apply the per package limitation would be as described in Article IV, Rule 5(a) therein. In case where U.S. Carriage of Goods by Sea 1936 apply the limitation is US $ 500.
37. ' The result of the above discourse is that these suits are decreed as against the defendant No,1 in both the suits but these defendants will be entitled to limit their liability to the market value in Pakistani currency of 732.238 grams of 22 carat gold as quoted in bullion rate published in leading newspapers. On the date of delivery of the cargo which for uniformity's sake will be taken to be the date of the arrival of the vessel in the &charge port as mentioned in the plaint which in Suit No,1159 of 1990 is 25-12-1989 and in Suit No,577 of 1993 is 8-9-1992. It is clarified that if the bullion rates are not published on the date of arrival of the vessel then the rates of next succeeding date when the rates are published will be taken. If rates of 22 carat gold are not quoted for Karachi then the rates for Lahore will be taken. It is further clarified the concept of per package limitation of liability is that it will only apply if the suit amount is more than the limitation amount calculated as above.
38. However, if it is the suit amount is less than the limitation amount then the suit would be deemed to be decreed for suit amount. This suit is also decreed against the defendant No,2 in both suits but the liability of the defendant No,2 would be a secondary liability. This suit is dismissed as against defendant No,3 in Suit No,1159 of 1990. There will be no orders as to costs but interest will be payable on decretal amount at 14% per annum from the date of filing suit till payment.