Judgment
As delivered
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) 4251993 SCC (2) 639 JT 1993 (2) 3961993 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 perilsof 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 ofCourt of Appeal--What are.
HEADNOTE:The plaintiff had purchased crushed and uncrushed salt fromDefendent No. 3 on payment By a charter party agreementDefendent No. 2, chartered a vessel to Defendent No. 3 forloading salt at Kandla Port in Gujarat and for carrying thesame to Calcutta Port. The Plaintiff had directly paid toDefendent No. 2 the freight amount for transport of cargofrom Kandla to Calcutta. Defendent No. 2 had informDefendent No. 3 that the Plaintiff is accepted as Sub-Charteres. The Plaintiff had itself insured the cargothrough the Insurance Company for Rs. 9,50,000. The policywas for the voyage from Kandla to Calcutta with InstituteCargo Clauses (FPA) cover attached including warehouse towarehouse risks and sling loss but excluding war and SRCCrisks.The plaintiff loaded the salt on the said Vessel at Kandlafor shipment to Calcutta. The vessel left Kandla and theplaintiff received a telex message form defendent No. 2informing that the vessel was at an anchorage at Sand-headsnear Calcutta and was experiencing engine426trouble. The vessel was required to be towed from sand-heads to Vishakhapatnam as repairs could not be undertakenat sand-heads. The plaintiff was informed and it in turninformed the Insurance Company about the said development.The vessel could not be repaired as the Hindustan Shipyardwho was to carry out the repairs were not paid the requisitecharges by the Owner, Defendent No. 1.The crew members were not paid their wages and theyinstituted an Admirality Suit in the High Court, whichpassed an order arresting the vessel including cargo etc.and appointed a Receiver for the vessel and the cargo.Consent was given by the plaintiff for the sale of thevessel and the cargo. The High Court directed the receiverto sell the vessel along with the cargo. An amount ofapproximately Rs. 12.5 Lacs was received as sale proceeds ofthe vessel and the cargo. The plaintiff approached the HighCourt requesting to direct the receiver to withhold anamount of Rs. 9,50,000 for the benefit of the plaintiffagainst loss of its goods. High Court declined to grant therequest and the appeal preferred by the plaintiff also endedin dismissal.Plaintiff filed a suit claiming recovery of the losssuffered by him, viz. Rs. 9,50,000. The claim was madeagainst the owner of the vessel, the charterer and theInsurance Company.The Trial Court passed a decree against all the defendentsin the sum of Rs. 10,49,750 i.e. 9,50,000 with interest.On an appeal by the Insurance Company, the Division Bench ofthe High Court dismissed the suit decreed by the SingleJudge against the Insurance Company and other defendents.Being aggrieved by the High Court's judgment, the plaintiffand defendent No. 3 in the suit preferred the presentappeals before this Court.Dismissing the appeal of the plaintiff, and allowing theappeal of defendent No. 3, this Court,HELD 1.1. It is axiomatic that the burden was on theplaintiff to prove the loss due to perils of the sea and onthe facts of the case, at no stage, such a burden wasshifted on Insurance Company to prove otherwise. [437E]4271.2. The cables sent by the Master of the ship do not showthat sea water had entered the engine room and it was not acase of loss of goods due to perils of the sea. Theexpression "warehouse to warehouse" merely indicates theperiod during which the policy would remain in force and hasnothing to do with the type of the risk policy covered. Itwas not a case of abandonment of the goods because of theperils of the sea. In fact the plaintiff gave the consentfor permitting the sale of cargo and to recover the valuethereof [437B-D]1.3. Since the finding of the High Court is that no seawater entered in the engine room and the fact that the cargowas intact even after the ship was towed to Vishakhapatnamshowed that no sea water entered the ship and, therefore,the loss to the plaintiff was not on account of perils ofthe sea and the suit of the plaintiff against the InsuranceCompany i.e. defendent No. 4 was rightly dismissed by theHigh Court. [438B-C]2.1. The plaintiff was dealing itself directly withdefendent No. 2. The plaintiff directly paid the freightof the voyage to defendent No.2. The plaintiff took theBill of Lading in its own name itself. Thus there was nocause of action whatsoever against defendent No. 3. [438E]2.2. On the facts and circumstance of the case in so far asit relates to defendent No, 3, it was a fit case for theHigh Court to have exercised power under Order 41 Rule 33C.P.C. to set aside the decree passed by the trial courtagainst defendent No. 3 without having discussed any issueagainst defendent No. 3 and to decide the case itself Thefacts are simple and life in narrow compass and show totalnon-liability of defendent No. 3 to the claim put forward bythe plaintiff against it. No cause of action is establishedagainst defendent No. 3 who merely sold salt to theplaintiff and introduced defendent No. 2, the Charter Partyto the plaintiff. The plaintiff thereafter directly dealwith defendent No. 2 by paying the freight to defendent No.2 and by estaining the Bill of Lading in its own name. Theproperty in goods had already passed on to the plaintiffbefore it obtained the Bill of Lading. [442G-H, 443A-B]Choudhary, Sahu (dead) by, L.Rs. v. State of Bihar, AIR 1982SC 98: Mahant Dhangir and another v. Shri Madan Mohan andOthers, Al R 1988 SC 54; Pannalal v. State of Bombay andothers, [1964] 1 SCR 980 and Giani Rai?? and others v. RamjiLal and others, [1969] 3 SCR 944, relied on. [438H, 439A-G]428
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4611--12/.1992From the Judgment and Order dated 16/17-1-1992 of the BombayHigh 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 theRespondents.
The Judgment of the Court was delivered byYOGESHWAR DAYAL, J. These are two appeals being Nos. 4611 of1992 and 4612 of 1992 riled by M/s. Bihar Supply Syndicate,plaintiff in the suit and United Salt Works and IndustriesLtd., defendant No.3 in the suit respectively, against thejudgment of the High Court of Bombay dated 16th and 17thJanuary, 1992.
By the impugned judgment the Division Bench of the HighCourt, on an appeal, by the National Insurance CompanyLimited, defendant No.4 in the suit, accepted the appealagainst the judgment and decree dated 30th September, 1987passed by the Single Judge in Suit No. 641 of 1973 anddismissed the suit decreed by the Single Judge against itand 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 CivilAppeal No. 4611 of 1992, along with interest on Rs. 9,50,000at the rate of 12% per annum from 17th June, 1973 tillrealisation and costs of the suit.
The facts giving rise to the filing of Civil Appeal No. 4611of 1992 filed by the plaintiff may be noticed.The plaintiff/appellant is a partnership concern carrying onbusiness as dealers in salt. Defendent No.1, M/s. AsiaticNavigation Incorporated is a Company incorporated in UnitedStates and is owner of vessel known as M.V. 'AtlasNavigator'. The vessel is registered at Panama and fliesthe Panama Flag. Defendant No.1 is carrying on business inBombay through its agent. Defendant No.2, namely M/s.Thakur Shipping Company Ltd. is429a Public Ltd. Company carrying on business of shipping andoperate the vessel Atlas Navigator belonging to DefendantNo.1. Defendant No.3, United Salt Works and Industries Ltd.,who is appellant in Civil Appeal No. 4612 of 1992 is also aLtd. Company and carry on business in Bombay asmanufacturers, merchants and charterers. Defendant No.4 isa General Insurance Company who, after the nationalisationof the General Insurance business had succeeded to theinterest of the Skandia Insurance Company Ltd., a Companyregistered in Sweden.
By a Charter Party agreement dated 17th June, 1972,Defendant No.2, chartered the vessel Atlas Navigator toDefendant No. 3 for loading salt at Kandla Port in Gujaratand for carrying on the same to Calcutta Port. Clause 14 ofthe agreement enabled Defendant No.3 to sublet the rightunder the Charter Party agreement and Defendant No.3 subletthe said right in favour of the plaintiff. The plaintiffhad purchased from Defendant No.3 itself a cargo of 4434metric tons of crushed salt at the rate of Rs. 33 per metricton and 2741 metric tons of uncrushed salt at the rate ofRs. 30 per metric ton and had paid a sum of Rs. 6,82,000towards the price of the salt of Defendant No.3. Theplaintiff had directly paid to Defendant No.2 the freightamount of Rs. 3,95,000 for transport of cargo from Kandla toCalcutta. Defendant No. 2 had agreed to arrant,,,; forcarriage of salt from Kandla to Calcutta as per the Bill ofLading issued in that behalf in favour of the plaintiff.Defendant No.2. had informed the defendant No.3 that theplaintiff is accepted as sub-Charteres and necessary stepswill be taken to inform the plaintiff about the movement ofthe vessel. The plaintiff had itself insured the cargothrough Skandia Insurance Company against the InsurancePolicy dated 12th July, 1972 and the sum insured was Rs.9,50,000. The policy was for the Voyage from Kandla toCalcutta with Institute Cargo Clauses (FPA) cover attachedincluding warehouse to warehouse risks, including sling lossbut excluding war and SRCC risks. Defendant No.4 is thesuccessor to the Skandia Insurance Company, as statedearlier.
The plaintiff loaded 7165 metric tons of salt on the saidAtlas Navigator at Kandla for shipment to Calcutta andloading was completed on July 4, 1972. The vessel leftKandla on July 9, 1972 and on July, 28, 1972 the plaintiffreceived a telex message from defendant No.2 informing thatthe vessel was at, an anchorage at Sand-heads near Calcuttaand was experiencing engine trouble. The plaintiff wasinformed that the agent of430the vessel would be communicated from time to time. M/s.Shaw Wallace and Company who is the agent of defendant No.2informed the plaintiff on July 28, 1972 that the dischargeof the vessel will be commenced only after the plaintiffprovided with usual General Average Bond in lieu of the cashdeposit. The plaintiff by its letter dated August 17, 1982addressed to defendant No.1 complained about failure toadvise movement of the vessel. The vessel was required tobe towed from Sand-heads to Vishakhapatnam as repairs couldnot be undertaken at Sand-heads. The plaintiff became awareof the said facts. Defendant No.2 addressed a letter datedAugust 18, 1972 to one R.Ramos of Hexagon Shipping Ltd. andendorsed a copy to the plaintiff. The letter inter aliarecited that the vessel had been diverted to Vizag alongwith the cargo under tow. The plaintiff claimed to haveinformed the Insurance Company about the above development.The repairs to. the vessel were expected to be completedshortly and vessel was expected to be back in Calcutta withcargo. The vessel could not be repaired as the HindustanShipyards who was to carry on the repairs were not paid therequisite charges by the owner, Defendant No.1.The vessel was neither repaired nor the wages of the crewmembers were paid with the result that the crew membersinstituted Admirality Suit No.1 of 1973 in the High Court ofJudicature, Andhra Pradesh at Hyderabad. On February 13,1973 the Court passed an order arresting the vesselincluding cargo etc. and appointed a Receiver for the vesseland the cargo. The consent was given by the plaintiff tothe sale of the vessel and the cargo and the vessel alongwith the cargo was sold by order of the Court on March 27,1973. The order of the High Court directed the Receiver tosell the cargo also. The plaintiff, as stated earlier, hadgiven the consent to sell the cargo. The consent was givenby the plaintiff as it was found that the costs of unloadingthe cargo from the damaged vessel was more than the value ofthe cargo itself. Subsequently, the plaintiff tried towithdraw the consent but the Receiver had by that time notonly obtained the order for sale of the vessel along withcargo but had also auctioned the vessel along with thecargo. An amount of approximately Rs.12.5 lacs was receivedas sale proceeds of the vessel and the cargo. The plaintiffthen approached the Andhra Pradesh High Court requestingthat the Receiver should be directed to withhold the amountof Rs. 9,50,000 out of the sale proceeds for the benefit ofthe plaintiff. The High Court of Andhra Pradesh declined togrant the request and the appeal preferred by the plaintiffalso ended in dismissal. It was claimed by the plaintiffthat they431had informed the Insurance Company about the abandonment oftheir right in respect of the Cargo due to inability toreclaim the cargo from the damaged vessel.
On these averments the plaintiff claimed that defendant No.1as owner of the ship was bound to deliver the cargo atCalcutta and having failed to do so was required to pay tothe plaintiff the market value of the goods estimated atRs.9,50,000. The plaintiff claimed that defendant No. 2 whowas the charterers and operators of the vessel and defendantNo. 3 as sub-charterer are bound and liable to pay to theplaintiff value of the goods estimated at Rs. 9,50,000. Inparagraph 38 of plaint it was averred that defendant No.4had insured under the policy goods from warehouse Kandla towarehouse Calcutta. The plaintiff claimed that as the goodswere not delivered to the plaintiff at Calcutta and as theexpenses incidental to reshipment to Calcutta were much morethan the insured value, the goods were deemed to be thetotal loss. The plaintiff claimed that the goods wereabandoned and notice was given to the Insurance Company andthe Company had acquiesced in and accepted the abandonmentof the cargo by the plaintiff in favour of defendant No.4.The plaintiff claimed that as they had suffered a loss ofRs.9,50,000 the Insurance Company was bound to reimburse theclaim to the extent of Rs.9,50,000 under the InsurancePolicy.
Defendant No.1, the owner of the ship did not file thewritten statement and trial against it proceeded ex-parte.Defendant No.2, the charterer filed its written statementclaiming that the master of the vessel intimated that theengine room of the vessel was flooded and vessel was in adangerous condition and the crew was standing by forabandoning the ship. Defendant No.2 claimed that they arenot liable for the claim made in the suit in view of theterms and condition of the Charter Party and the Bill ofLading. Defendant No.3 by its written statement claimedthat defendant No.2 had accepted the sub-letting in terms ofclause 14 of Charter Party and all rights andresponsibilities of defendant No.3 had passed to theplaintiff and no cause of action arose against defendantNo.3. Defendant No.3 had also pleaded that the plaintiff haddirectly paid the freight to defendant No.2 and consequentlythe liability, if any, was of defendant No.2 and not ofdefendant No.3. Defendant No.3 also claimed that the titleof the cargo was passed to the plaintiff and defendant No.3had nothing to do with the non-delivery of cargo atCalcutta.
432Defendant No.4, the Insurance Company, filed its writtenstatement claiming that the plaint did not disclose anycause of action against the Insurance Company. DefendantNo.4 also pleaded that the plaintiff had not even averred inthe plaint that the owner of the vessel had advised ofabandoning of frustration of voyage and under thecircumstances no claim under the policy could be made.Defendant No.4 then pleaded that the liability under thepolicy should arise provided the perils of the sea haddamaged the cargo as the policy had insured against theperils encountered. The Insurance Company denied that theCargo was deemed to be lost and that the plaintiff hadabandoned the cargo and the Insurance Company had acquiescedor accepted the alleged abandonment.
On these pleadings the learned trial court settled separateissues between the plaintiff and defendant No.2; as many asfive issues between the plaintiff and defendant No.3(appellant in Civil Appeal No. 4612 of 1992) and betweenplaintiff and defendant No.4. The issues settled between theplaintiff and defendant No.4 were as under :-
"(1) Whether the plaint does not disclose anycause of action against the 4th defendants asalleged in para 1 of, the written statement ?(2) Whether the plaintiffs have suffered anyloss due to any of the perils insured againstby the Policy of Insurance dated 12.7.1972 ?(3) Whether the plaintiffs abandoned thegoods as alleged in para 38 of the plaint ?(4) Whether the 4th defendants acquiesced inabandonment as alleged in paras 35 and 38 ofthe plaint ?
(5) Whether there was total loss as allegedin para 38 of the plaint ?
(6) What relief, if any ?
The issues settled between the plaintiff anddefendant No.3 were as under :-
(1) Whether the plaintiffs are a registeredpartnership433firm as alleged in para 1 of the plaint ?(2) Whether the plaint discloses any causeof action as against this defendant as allegedin para 31 of the written statement ?
(3) Whether this defendant was liable assub-charterers to pay the plaintiffs themarket value of the said goods at Calcuttabeing Rs.9,50,000 as set out in Ex.'E' of anypart thereof as alleged in para 3 of theplaint ?
(4) Whether this defendant is absolved fromall liabilities of the plaintiffs as allegedin para 28 of the written statement ?
(5) Whether the plaintiffs are entitled toany relief against this defendant ? If so,what ?"
The trial court, as stated earlier, decreed the suit of theplaintiff against all the four defendants. In the presentappeals before us we are not concerned with the rights ofthe plaintiff vis-a-vis defendants 1 and 2 as defendants 1and 2 did not prefer any appeal against the decision of thetrial court. The defendant No.4, namely the InsuranceCompany, filed the appeal before the Division of the HighCourt whereas defendent No.3, United Salt Works andIndustries Ltd., (appellant in Civil Appeal No. 4612 of1992) preferred cross-objections on receipt of notice ofappeal filed by M/s. National Insurance Company Ltd. Thetrial court while decreeing the suit against the InsuranceCompany held issue numbers 1, 2, 3 in the affirmative, infavour of the plaintiff and against defendant No.4. On issueNo.4 he held that it was not necessary. Issue No.5 was alsoanswered in the affirmative and issue No.6 as per the order.
Consequently the trial court decreed the claim of theplaintiff against all the defendants in the sum of Rs.10,49750 with interest on Rs. 9,50,000 at the rate of 12 percent per annum from 17th June, 1973 till realisation withcosts of the suit.
It is curious that though the trial court found issues assettled between the plaintiff and defendant No.3 againstdefendant No.3 but there is no discussion at all in thetrial court judgment for various findings recorded againstdefendant No.3. On appeal by the Insurance Company theDivision Bench of the Bombay High court examined the oralevidence434led by the Insurance Company of its Assistant GeneralManager Shri Dhirubhai A. Shah and one of its employee ShriMangaldas Keshavji Jagad. The Division Bench also examinedthe evidence led on behalf of Defendant No.2 of Sh. SentuVazirmal Ramchandani who had carried out the work of surveyof the damaged vessel at Vishakhapatnam.
Before the Division Bench it was submitted on behalf of theInsurance Company No.4, that its liability arises out ofMarine Insurance Policy and the plaintiff cannot succeed inobtaining a decree against it unless it is established thatthe goods were lost due to perils of the sea. It wassubmitted on its behalf that the plaintiff had not evenaverred in the plaint that the goods were damaged due toperils of the sea. It was also submitted that the trialcourt entirely misconstrued the terms of policy anderroneously concluded that the loss was caused due to perilsof the sea. It was submitted on behalf of the InsuranceCompany that the trial court was in error in assuming thatthe term in the policy that the risk is covered fromwarehouse to warehouse means that the policy covers allkinds of risks to the vessel and the goods.
On behalf of the plaintiff/respondent No.1 in the appealbefore the High Court, it was submitted on the other handthat the finding of the trial court that the loss was causeddue to perils of the sea justified. It was also pleaded inthe alternative that the policy covered all risks fromwarehouse at Vishakhapatnam to warehouse at Calcutta and asthere was constructive loss of all the goods the plaintiffwas entitled to a decree.
In view of these rival contentions, the High Court felt thatthe question which falls for determination is whether theplaintiff has suffered loss due to any perils of the seainsured 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 ofinsurance was subjected to FPA terms as per the InstituteCargo Clauses (FPA attached) including warehouse towarehouse risks. It also found that the "plain reading ofthe policy makes it clear that claim under the policy ispermissible provided the insured establishes that the losswas caused due to perils of the sea". Thereafter the HighCourt examined four cables on which the plaintiff reliednamely the cable dated 19th July, 1972 sent by the master ofship which inter alia recites that the engine has stoppeddue to damaged boiler435and it further recites that there is no remedy and soughtpermission to employ Tegboat; the second cable dated 21stJuly, 1972 which stated that the vessel is steaming on powernear Sand-heads; the third cable dated 22nd July, 1972recited that anchored pilot stationed at Calcutta Portrefused to bring the vessel in the Port due to non-availability of the engine power and steamer power; thecable then recited that there is no provision of Water andurgent assistance is required and the last cable dated 25thJuly, 1972 rejected that the engine room had been floodedand the request for emergency pump had not received anyresponse. The cable then mentioned that the generator islikely to shut out any time and the situation has becomevery dangerous and crew had been ordered to stand by forabandoning the ship. The learned Judges of the DivisionBench noticed that from the contents of theses four cablesthe trial judge came to the conclusion that the vessel hadsuffered casualty on account of the damage to the machineand the engine and the main boiler not functioning. TheHigh Court further noticed that trial judge felt that thecables disclosed that initially there was engine trouble dueto damage to the boiler but later the engine room wasflooded and that had resulted in the condition of the vesselbecoming very dangerous so much so that the crew wasstanding by for abandoning the vessel. The Division Benchalso noticed that the finding of the trial court that theflooding of the engine room could not have been possibleexcept from the sea water. The Division Bench feltdifficulty in appreciating on what basis the trial judgeproceeded to draw such an inference. After examining thecontents of the four cables the Division Bench took the viewthat the contents of the cables no where disclose that thewater which entered the engine room was the sea water. TheHigh Court felt that it was a matter of common knowledgethat the water is stored an the vessel for the purpose ofballast. The learned Judges felt that the trial judge'sfinding that the engine room was flooded with sea water andtherefore the vessel had suffered by perils of the sea waserroneous. The learned Judges of the Division Bench feltthat the trial judge had overlooked that the evidence onrecord urmistakably establishes that the vessel was towedback to Vishakhapatnam; was ultimately arrested by the orderof the Andhra Pradesh High Court and was sold along with thecargo and they took the view that the finding of the trialjudge that the flooding of the engine room with sea water iswithout any basis. The High Court observed "'it isnobody's case that the vessel was leaking and the sea waterhad flooded in the vessel. The fact that the vessel couldbe towed back to Vishakhapatnam and was available for beingarrested and sold in auction,436is a telltale circumstance to establish that there washardly any damage to the vessel and much less due to perilsof the sea at Sand-sea near Calcutta Port." On the otherhand the High Court gave a finding that there is positiveevidence to establish that sea water had never entered inthe vessel at any time and the cargo had not even beendamaged. The Division Bench also examined the survey reportproduced by the plaintiff itself dated 14th March, 1973 madeby Erlcoon and Richards (Andhra) (Ext. IN,) which showedthat the surveyors boarded the vessel on 12th March, 1973while it was lying alongside J-3 berth, Vishakhapatnam inorder to inspect and ascertain the condition of the cargo onboard. The report establishes that the bulk cargo of saltwas stored in the vessel's five numbers hatches and the samewas found in apparent good condition throughout. The HighCourt thus gave a finding that the vessel and the cargo hadnot suffered due to perils of the sea. The High Court alsoon examination of the evidence of Shri R.C. Walia, partnerof the plaintiff clearly gave another finding that "thecase put forward by the plaintiff was that the vessel wastowed back to Vishakhapatnam for effective repairs byHindustan Shipyards. Walia in examination-in-chief statedthat the vessel reached Sand-heads near Calcutta andsuffered from engine trouble and therefore could not reachCalcutta Port. Walia further stated that the PortAuthorities did-not permit the vessel to enter the Port andthe vessel had to be towed to Vishakhapatnam for repair.Walia then stated "the Hindustan Shipyard tried to repairthe ship but as the defendant No.1 did not give thenecessary funds the vessels could not be repairedultimately. In the meantime the Master of the vesseland crew were not paid their wages for which they filed asuit in the Andhra Pradesh High Court. Thereafter the vesseland the cargo were sold." The engine and the boiler of thevessel failed possibly because of non-repair and it wasnot the liability of the Insurance Company to reimburse theplaintiff for the loss of the goods because of failure ofthe owner of the vehicle of incur expenses for repair ofthe ship. Thereafter the High Court also noticed that afterthe proceedings had been lodged by the Master and the crewmembers in the Andhra Pradesh High Court for arrest andsale of the vessel, the plaintiff had given the consent tothe sale of the carge. The High Court accordingly gavefurther finding that "it is therefore futile for plaintiffnow to claim that the cargo was abandoned because of theinability to salvage it without incurring expenses higherthan the value of the cargo itself." The High Court feltthat the failure to carry out repairs can by no stretchof imagination be said to be the perils of the sea andaccordingly gave a finding that the trial judge437was in error in concluding that the plaintiff hadestablished that the loss of the cargo was due to perils ofthe sea.
We have gone through the evidence on record including thefour cables mentioned earlier. We are in complete agreementwith the Division Bench of the High Court that the cables donot show that sea water had entered the engine room and itwas 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 thetime during which the policy would remain in force and by nostretch of imagination can be interpreted as covering eachand every risk. We are also in agreement with the DivisionBench of the High Court that expression "warehouse towarehouse" merely indicates the period during which thepolicy would remain in force and has nothing to do about thetype of the risk policy covered.
The policy remained a typical Marine Voyage Policy withInstitute Cargo Clauses (FPA) and in the absence of loss dueto perils of the sea, the Insurance Company was not liable.We are also in agreement with the view of the High Courtthat it was not a case of abandonment of the goods becauseof the perils of the sea. We are also in agreement with theview of the High Court that it was not a case of abandonmentof the goods. In fact the plaintiff gave the consent forpermitting the sale of cargo and to recover the valuethereof It. is axiomatic that the burden was on theplaintiff to prove the loss due to perils of the sea and onthe facts of the case, at no stage, such a burden wasshifted on Insurance Company to prove otherwise. UnderSection 2(a) of the Marine Insurance-Act 1963 (Act No.11 of1963) (shortly stated the Act) a "contract of MarineInsurance" means a contract of Marine Insurance as definedby Section 3. Section 3 defines that a contract of MarineInsurance is an agreement whereby the insurer undertakes toindemnify the assured, in the manner and to the extentthereby agreed, against marine losses, that is to say thelosses 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 438 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,
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 439 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 440 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 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 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 442 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 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 443 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. 444
