Bombay High Court Hears Admiralty Suit for Recovery of Value of Goods Lost Due to Non-Issuance of Bill of Lading. Claim Against Vessel Owner and Agent for Breach of Duty Under Carriage of Goods by Sea Act is Examined.

Admiralty suit for recovery of value of goods lost due to non-issuance of bill of lading and consequent inability to deliver cargo

Plaintiff sought recovery of US$ 57,860.00 with interest at 18% p.a. from defendants jointly and severally

Defendant no. 3 wrongfully withheld the bill of lading despite payment of freight, causing loss of goods and expiry of letter of credit

Whether defendant no. 3 was obligated to issue a bill of lading upon payment of freight and mate receipts, and whether its failure to do so makes all defendants liable for the value of the lost goods. Whether defendant no. 2, as principal of defendant no. 3, is liable for the agent’s act of withholding the bill of lading. Whether defendant nos. 1 and 4, the vessel and its owner, can be held liable in rem or in personam absent a direct contractual relationship with the plaintiff. Whether the plaintiff is entitled to claim the value of goods, D.E.P.B. credit, and interest, given the dispute over outstanding dues of an associated company.

Plaintiff argued that under the Carriage of Goods by Sea Act, the bill of lading is a document of title that must be issued by the carrier or its agent; having paid all freight and charges, defendant no. 3’s refusal to issue the bill was a breach giving rise to liability. Defendant nos. 1 and 4 contended they were not privy to the contract between plaintiff and the agent/carrier and had merely performed the carriage; they argued that no liability can attach to the vessel or owner in the absence of personal liability. Defendant no. 2 denied liability, asserting that defendant no. 3 acted without its authority or consent, and thus any wrongful act was on the agent’s own account. Defendant no. 3 claimed it was acting for a disclosed principal and that under an oral credit arrangement, the plaintiff’s group company owed outstanding dues which justified withholding the bill of lading; it also argued the plaintiff could have mitigated loss by paying the disputed amount.

It is the case of the plaintiff that under the provisions of Carriage of Goods by Sea Act the bill of lading being the document evidencing the title is required to be issued by defendants and an obligation is cast upon the carrier/ operator/ agent to issue the bill of lading or some other document certifying therein that the said goods are shipped on board and that they will deliver the same to the holder thereof on the presentation of the same to them. However, the 3rd defendant in spite of obtaining the necessary payments from the plaintiff both in respect of the outstanding arrears as well as in respect of the suit consignment, did not issue the bill of lading. He inter alia contended that there were some other outstanding due and payable by one Deepak Woollen Mills Ltd.

The plaintiff filed Admiralty Suit No. 27 of 1999 before the High Court of Judicature at Bombay exercising Admiralty and Vice Admiralty jurisdiction. The suit sought recovery for loss of export goods due to non-issuance of a bill of lading. Defendants filed written statements resisting the claim. The matter came up for hearing before S.U. Kamdar, J., on August 9, 2005. The text of the oral judgment remains incomplete, and no final order is recorded.

• Carriage of Goods by Sea Act, 1925: