Judgment Sheet

 

IN THE HIGH COURT OF SINDH AT KARACHI

 

Suit No. 906 of 2011

 

 

Plaintiff          :           Pakistan Water & Power Development Authority,

through Mr. Badar Alam advocate.

 

Defendant No.2 :     MAQ International, through

Ms. Saman Raffat Imtiaz advocate.

 

            Defendant No.3 :     Pakistan National Shipping Corporation,

                                                through Mr. Shaiq Usmani advocate.

 

Dates of hearing :    16.05.2016, 30.05.2016, 15.06.2016, 26.09.2016,

                                    06.02.2017 and 29.05.2017.

 

 

ORDER ON C.M.A. No. 14288 of 2013

 

           

NADEEM AKHTAR, J.Through this application under Order VII Rule 11 CPC read with Section 3 of the Limitation Act,1908, defendant No.3 has prayed for dismissal of this Suit on the ground that the same is barred by time.

 

2.         This Suit for declaration, mandatory injunction and recovery of losses and damages has been filed by the plaintiff (WAPDA) against the defendants. The case of the plaintiff, as averred in the plaint, is that it agreed to purchase from the defendant No.1-company and the said defendant agreed to sell and deliver to the plaintiff the consignment described in para 2 of the plaint for the plaintiff’s Thermal Power Station at Jamshoro Sindh on the terms and conditions contained in the purchase order dated 28.06.2007 ; the consignment was to be delivered at Karachi port within twenty weeks from the date of establishment of letter of credit through defendant No.3 (PNSC) ; performance bond / guarantee dated 23.06.2007 equivalent to 10% of the total value of purchase order was furnished by defendant No.1, which was extended / renewed up to 31.01.2012 ; the plaintiff established irrevocable letter of credit dated 07.07.2007 in favour of defendant No.1 with latest date of shipment as 23.11.2007 and date of expiry as 08.12.2007 as per the agreed terms and conditions, which was amended at the request of defendant No.1 ; a copy of non-negotiable bill of lading No.ANR-1 allegedly issued by defendant No.3 to defendant No.1 at Zurich on 04.12.2007 was supplied to the plaintiff by its clearing and forwarding agent requesting the plaintiff to provide shipping documents of the consignment ; the plaintiff issued letters and reminders dated 05.01.2008, 08.01.2008 and 14.01.2008 to defendant No.2 that defendant No.1 was required to supply three sets of non-negotiable shipping documents ten days prior to the arrival of the vessel ; vide letter dated 30.01.2008, defendant No.3 requested the plaintiff to make payment of ocean freight for issuance of delivery order and intimated that the vessel ‘Pacific Express’ had arrived on 04.01.2008 ; copies of shipping documents were delivered to the plaintiff for the first time on 03.03.2008 ; vide letter dated 03.03.2008, the plaintiff instructed its clearing agent to arrange and provide a shipping guarantee in case of non-receipt of original bill of lading, and on the same day the clearing agent requested the plaintiff to supply original bill of lading, invoice endorsed by the bank and packing list ; through a fax received on 04.03.2008 from the bank who had issued irrevocable letter of credit, the plaintiff came to know that defendant No.1 had made shipment on 08.12.2007 through the defendant No.3’ vessel ‘Pacific Express’ and had lodged its claim with the corresponding bank on 29.02.2007 for payment of 90% of the amount of letter of credit ; from the above, the bank noticed difference between the date of shipment and expiry of letter of credit and thus sought assistance of the plaintiff for calculating liquidated damages ; vide letter dated 06.03.2008, the plaintiff instructed the bank to retire the documents despite the above discrepancy and to supply documents after releasing 90% of invoice value to defendant No.1 and deducting liquidated damages ; after accepting the above request, duly endorsed negotiable bill of lading and other shipping documents were supplied in original by the bank to the plaintiff ; and, thereafter all requisite charges, duties and taxes were paid by the plaintiff for clearing the consignment.

 

3.         It is also the case of the plaintiff that it was surprised to receive a copy of letter dated 08.03.2008 addressed by its clearing agent to KPT that as per the information provided by defendant No.3, the consignment was not traceable at the port ; vide letter dated 10.03.2008, defendant No.3 requested its shipping agent to locate the consignment at the earliest ; Provisional Outturn report dated 14.03.2008 was issued by KPT in respect of one short landed package, copy whereof was supplied to the plaintiff by its clearing and forwarding agent ; letters dated 22.03.2008 and 16.04.2008 were issued by the plaintiff requesting defendant No.3 for latest status of the missing consignment, which were not responded to by defendant No.3 ; through the Short Landing Certificate dated 30.06.2008 issued by KPT on 02.07.2008 which was supplied to the plaintiff by its clearing and forwarding agent, it transpired that the consignment was not discharged from the vessel nor did it land at the Karachi port, shipment was not made by defendant No.1 nor did defendant No.3 receive the consignment, and the two bills of lading dated 04.12.2007 and 08.01.2007 in respect of the same consignment were false and fabricated ; copies of the Final Outturn Report dated 30.06.2007 issued by KPT, shipping documents and paid vouchers were sent to defendant No.3 by the plaintiff under cover of its letter dated 11.07.2008, calling upon defendant No.3 to indemnify the loss of Rs.19,823,710.00 sustained by it ; vide letter dated 18.07.2008, defendant No.3 rejected the above claim and advised the plaintiff to contact its insurer for settlement of its claim ; and, a copy of letter dated 30.12.2008 by the defendant No.1’s sub-office in Dubai was supplied to the plaintiff by defendant No.2 through which the plaintiff came to know that the delay in supplying shipping documents to the plaintiff had occurred as letter of credit, which had expired on 23.11.2006, was received on 23.02.2007 after extension.

 

4.         The plaintiff has further averred that vide letter dated 18.03.2009 defendant No.3 offered £100.00 to the plaintiff in full and final settlement of its claim under the Hague Rules, which was rejected by the plaintiff ; vide letter dated 01.03.2011 defendant No.3 increased the amount of compensation to       $ 2,929.00 ; and, vide letter dated 08.03.2011 the amount of compensation was further increased to Rs.1,489,462.00 by defendant No.3. In the above background, this Suit was instituted by the plaintiff on 29.06.2011 for declaration, mandatory injunction and recovery of losses and damages as the amount offered by defendant No.3 was not acceptable to the plaintiff.

 

5.         Mr. Shaiq Usmani, learned counsel for defendant No.3, contended that defendant No.1 has been sued as the shipper / supplier under a contract of sale, and defendant No.2 has been sued as the agent of defendant No.1 ; whereas, defendant No.3 has been sued as the carrier under a contract of carriage by sea. He pointed out that this Suit against defendant No.1 was dismissed as withdrawn on 26.10.2015, and the application filed by defendant No.2 for striking off his name is pending. He submitted that the Suit against defendant No.1 was within time as limitation against the said defendant was three years in view of the contract of sale between the parties, but the Suit against defendant No.3 is barred by time as limitation for filing the Suit against defendant No.3 shall be governed by the Hague Rules 1924. He contended that as per the bill of lading the port of shipment of the consignment in question was Antwerp, Belgium, where the Hague Rules were and are still applicable to the carriage of the consignment. In support of this submission, he relied upon paragraph 3 of Rule 6 of Article 3 of the Hague Rules which provides that In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless Suit is brought within one year after delivery of the goods or the date when the goods should have been delivered.

 

6.         Mr. Usmani further submitted that in case the port of shipment is not ascertainable due to any reason, the Carriage of Goods by Sea Act, 1925, which is also based on the Hague Rules, shall be applicable to the present case, and in such an event Articles 30 and 31 of the First Schedule to the Limitation Act, 1908, will apply to the present case which also provide limitation period of only one year for filing Suit against the carrier. He contended that under both the above Articles the said period of one year had commenced on 30.06.2008 when Short Landing Certificate was issued by KPT and the plaintiff became aware that their goods were no longer available. Learned counsel submitted that the Suit instituted on 29.06.2011 is thus barred by limitation under the Hague Rules as well as the Limitation Act, and as such the Suit should be dismissed or in the alternative the plaint may be rejected. In support of his submissions, he relied upon British India Steam Navigation Co. Ltd. V/S Abdul Razak-Abdul Kader and others, PLD 1967 SC 68, Izzat Bakhsh V/S Nazir Ahmad and 13 others, 1976 SCMR 508, Hakim Muhammad Buta and another V/S Habib Ahmed and others, PLD 1985 SC 153, Gladstone Wyllie & Co. Ltd. V/S Shahidi Trading Corporation Ltd. and another, PLD 1959 Dacca 73, Issak Haji Shakoor-Haji Jamal Co. V/S Messers United Oriental Steamship Co. and others, PLD 1960 (WP) Karachi 99, and Premier Insurance Company V/S China National Foreign, 1999 YLR 781

 

7.         On the other hand Mr. Badar Alam, learned counsel for the plaintiff, contended that it is well-settled that limitation is considered to be a mixed question of law and fact which cannot be decided without evidence, or on the basis of only one document viz. Short Landing Certificate dated 30.06.2008. He further contended that the plaintiff has specifically alleged in the plaint that two bills of lading of different dates were issued by defendant No.3 which were fictitious as the consignment described therein was never received on the vessel nor was the same ever discharged or delivered at the Karachi Port, and defendant No.3 did not inform the plaintiff about arrival of the vessel and copies of shipping documents were delivered to the plaintiff for the first time on 03.03.2008. It was urged that the above disputed questions of fact cannot be decided without evidence. He also contended that the claim of the plaintiff is not merely a claim on the basis of bills of lading as the plaintiff has also prayed for declarations that shipment of the consignment in question was not made and the alleged bills of lading in respect of the consignment, which was never received on the vessel, are fabricated documents. He submitted that in view of the declaration sought by the plaintiff, the Suit is not barred as the prescribed period of limitation for such relief is six years under Article 120 of the Limitation Act. It was urged that the plaint cannot be rejected in piecemeal if any one of the reliefs is within time. He further submitted that number of acknowledgements of liability and offers to settle the plaintiff’s claim were made by defendant No.3 before expiration of the one year period of limitation prescribed under Articles 30 and 31 of the First Schedule to the Limitation Act, and therefore limitation for filing the Suit stood extended on every such occasion under Section 19 of the Limitation Act. In support of his submissions, learned counsel relied upon Swiss Bank Corporation V/S Messers Temuka Navigation Company (Pvt.) Ltd. and 5 others, 2003 YLR 3314, Musarat Masood Lodhi and others V/S Masood Hameed Lodhi and others, 2003 MLD 9, and Zahid Tabassum Lilak V/S Pakistan Defence Housing Authority, Karachi and others, 2009 CLC 590.

 

8.         I have heard learned counsel for the parties at length and with their able assistance have also examined the material available on record and the law cited at the bar. In order to appreciate the submissions made by the learned counsel for the parties and to ascertain whether the plaint is liable to be rejected or not, the contents of the plaint and the averments and allegations made therein were carefully examined by me. A bare perusal of the plaint shows that the plaintiff has specifically alleged therein that the consignment was not received by defendant No.3 on its vessel and despite this situation, two bills of lading of different dates were issued by defendant No.3 ; the consignment was not discharged at the Karachi Port ; and, the bills of lading issued by defendant No.3 were bogus, fictitious and void. It is well-settled that for the purpose of rejection of the plaint, the averments and allegations made in the plaint are to be examined, and if upon a bare perusal thereof and assuming the same to be correct, a cause of action is spelt out from the plaint, it cannot be rejected. In Pakistan Agricultural Storage and Services Corporation Ltd. V/S Mian Abdul Latif and others, PLD 2008 SC 371, the Hon’ble Supreme Court was pleased to hold that the term cause of action represents all the requisites and facts which are necessary for the plaintiff to prove before he can succeed in a Suit. It is also well-settled that where a cause of action is disclosed, the question as to whether the plaintiff will be able to prove it or not, is irrelevant for deciding an application for rejection of the plaint ;and, the accompaniments of the plaint and other undisputed material on record can also be looked into for this purpose. In my humble opinion, the following accompaniments of the plaint and undisputed material on record are material for the purposes of the present application ; namely, copies of the two bills of lading dated 04.12.2007 and 08.12.2007 ; several letters issued by defendant No.3 to the plaintiff between 18.07.2008 to 01.03.2011 insisting that first notice of arrival of the vessel was served by defendant No.3 upon the plaintiff on 01.01.2008 and the plaintiff was required to lodge its claim within three days from the said date ; and, several letters issued by the plaintiff to defendant No.3 during the above period in response to the defendant No.3’s above letters / stance, denying receipt of first notice of arrival of the vessel, and insisting that the fact about the missing consignment came to the plaintiff’s knowledge for the first time through letter dated 02.07.2008 issued by its clearing and forwarding agent along with copy of Short Landing Certificate dated 30.06.2008 issued by KPT.

 

9.         The above allegations and counter allegations by the parties clearly indicate that they are at variance on questions of fact which cannot be resolved without recording their respective evidence. It is well-settled that a plaint cannot be rejected in such cases without affording opportunity to the parties to adduce evidence and without providing chance of hearing to them. This view expressed by me is supported by (1) Q.B.E. Insurance (International) Ltd. V/S Jaffar Flour and Oil Mills Ltd. and others, 2008 SCMR 1037, (2) Mst. Karim Bibi and    others V/S Zubair and others, 1993 SCMR 2039, (3) Muhammad Younis Arvi V/S Muhammad Aslam and 16 others, 2012 CLC 1445 (SC AJ&K) and          (4) Muhammad Afzal V/S Muhammad Manzoor and 40 others, 2013 YLR 85 (SC AJ&K). However, the above principle will be applicable and the plaintiff would be entitled to the protection thereof only when its claim against defendant No.3 is within time.

 

10.       I do not agree with the contention of the learned counsel for the plaintiff that in view of the declaration sought by the plaintiff the Suit is not barred as the prescribed period of limitation for such relief is six years under Article 120 of the Limitation Act. The prayer made in the plaint clearly shows that declaration has been sought by the plaintiff against defendants 1 and 2, and no declaration has been sought against defendant No.3.

 

11.       Learned counsel for defendant No.3 is absolutely right in saying that limitation for filing Suit against defendant No.3 shall be governed by the Hague Rules which provide limitation of one year after delivery of the goods or the date when the goods should have been delivered, and by Articles 30 and 31 of the First Schedule to the Limitation Act, which also provide limitation of one year from the date when the loss or injury occurs or when the goods ought to be delivered, respectively. In order to ascertain the starting point of limitation and whether the prescribed period of limitation stood extended at any stage, I have examined the accompaniments of the plaint and undisputed material on record. Various letters issued by defendant No.3 to the plaintiff show that defendant No.3 has been insisting that the vessel arrived at Karachi on 04.01.2008 and first notice of its arrival was served upon the plaintiff on 01.01.2008, and as such the plaintiff was bound under the Carriage of Goods by Sea Act, 1925, to inform defendant No.3 about the missing consignment within three days of arrival of the vessel. As noted above, the plaintiff has been asserting that the fact about the missing consignment came to its knowledge for the first time through letter dated 02.07.2008 issued by its clearing and forwarding agent along with copy of Short Landing Certificate dated 30.06.2008 issued by KPT. It appears that defendant No.3 has accepted the above stance of the plaintiff as the starting point of limitation has been stated in this application and has also been argued on behalf of defendant No.3 as 30.06.2008, being the date of Short Landing Certificate issued by KPT.

 

12.       Before expiration of the limitation period of one year from 30.06.2008, defendant No.3 vide letter dated 18.03.2009 offered £100.00 to the plaintiff to settle the claim, which was not only rejected by the plaintiff through its letter dated 05.09.2009, but it also insisted on its claim of Rs.19.230 million. Thereafter, within one year from its above mentioned first offer dated 18.03.2009 defendant No.3 issued letter dated 08.09.2009, whereby the plaintiff was once again called upon to accept £100.00 in settlement of its claim, and within one year of the said letter further reminders dated 25.05.2010 and 06.07.2010 were issued in this behalf by defendant No.3 to the plaintiff. The above offer made by defendant No.3 on the above mentioned dates was once again declined by the plaintiff through its letter dated 23.01.2011. By letter dated 01.03.2011, defendant No.3 revised / improved its offer by offering          $ 2,929.00 to the plaintiff, which was also declined by the plaintiff vide letter dated 07.03.2011. The offer was further revised / improved by defendant No.3 vide letter dated 08.03.2011 by offering Rs.1,489,462.00 to the plaintiff. It may be noted that the above mentioned revised / improved offers dated 01.03.2011 and 08.03.2011 were made by defendant No.3 before expiration of one year from the above reminders dated 25.05.2010 and 06.07.2010 in respect of the original offer of £100.00. The above facts which are based on admitted correspondence between the parties clearly show that the one year period of limitation never expired in this case, and before expiration of the said period defendant No.3 acknowledged its liability in writing and offered to settle the plaintiff’s claim. The effect of mentioning in its above letters by defendant No.3 that the offer was being made by it without prejudice and without admitting its liability, can be considered at the stage of final hearing. Needless to say that such mention in its offers by defendant No.3 cannot override the principle and effect of acknowledgment in writing enunciated in Section 19 of the Limitation Act. It is clarified that the observations made in this order are tentative in nature which shall not affect the merits of the case of any of the parties in any manner whatsoever, and the Suit shall be decided on merits in accordance with law.

 

13.       As a result of the above discussion, I have come to the conclusion that the Suit against defendant No.3 is not barred by limitation. The application is, therefore, dismissed with no order as to costs.

 

 

 

                                                                                                ____________________

            J U D G E