The Indian Carriage of Goods by Sea Act

The Indian Carriage of Goods by Sea Act was enacted on 21st September 1925. The Act extends to whole of India. Provisions made under this Act are referred as “Rules” and such rules shall have effect in connection with carriage of goods by sea in ships, which are carried from one port of India to foreign ports(outside India). Act covers various definitions like “Carrier, Contract of Carriage, Carriage of goods, Goods and Ship”. For the act “Goods are those which covers not only live animals but also containers, or pallets or any similar articles of transport or packing supplied by the consignor, regardless of whether such property is to be or is carried on or under deck” and “Ship is that vessel which is used to carry goods by sea from one place to another”. Any contract made for carrying of goods by sea carrier whether it could for loading, carriage, handling etc, is governed under rules like “responsibilities and liabilities” and “rights and immunities” by this act.

At the start of the journey carrier is bound to take proper care and diligence such as ship is made safe to go in sea, properly equip the ship, see whether the refrigeration, and other cooling parts in ship are proper and in good working condition. In other words, the ship should be properly loaded with all due diligence and other conditions in favour of sea so that ship is properly taken from one place to other. After the ship is loaded the shipper can ask for bill of lading. That bill of lading will show weight, quantity, pieces of goods that are loaded, necessary marks that are given to identify goods, time that the ship will reach the destination, insurance covered for any loss or damages if to occur. As the carrier has to take care and diligence there are certain rights and protection to them.

Ship or the carrier is not responsible for any loss which can be happen due to sea, act of god, act of war, any riots and civil disturbance, segregated restriction act of public enemies, saving or trying to save life of property at sea, insufficiency in packing, insufficiency or not exact marking on goods, latent defects not discoverable by due diligence, if there is any fire caught to ship or carrier. But this act will not immune the shipper or carrier if such loss or damage is caused purpose or if there is any negligence while doing so. Good which are explosive and dangerous in nature and is not in knowledge or not assented about nature to carrier or master may at any time before discharge be landed at any place or destroyed by the carrier without compensation then the such shipper will be liable for all damages expenses directly or indirectly arising out of or resulting from such shipment. Even the shipper or carrier is not responsible for any act or mistake which has done by their servant or agent.

Thus Carrier or ship are at their own discretion to whole or in part autonomy increase the liabilities or immunities as they feel so i.e., they can increase the responsibilities and waive the immunity or if they feel they can increase the immunity and waive the responsibility. The agreement made should be legally valid and thus possess legal effect. In short, any carrier or ship is not exempted from entering into agreement they has to enter in agreement for safety purpose which will include condition of goods, reservation or waiving of responsibilities and immunities, handling of goods with proper care, loss or any damages.

Thus, main purpose for lading the Bill by the Legislature so that rules which are mentioned in act will bring uniformity and stability and importantly assure that goods that are loaded will be taken to the given point carefully and in proper manner which guarded with rules i.e., with legal foundation.

Bill Of Lading Falling Within The Carriage Of Goods By Sea Act 1971

Under Article III (3) of this Act, the carrier has to include the leading marks, the number of packages or pieces or the quantity or weight of the goods and the apparent order and condition of the goods on the bill of lading. The statements made on the bill of lading are regarded as prima facie evidence of the receipt of the goods as described under III(4).

According to Common Law, a statement specifying quantity received is a prima facie evidence of the quantity shipped. The burden of proof lies on the carrier to prove that the cargo as specified has not been shipped. This burden is an absolute one.

In the case of Smith v/s. Bedouin Steam Navigation Co [1896], the bill of lading stated that 1,000 bales of jute had been shipped, whereas only 988 bales were delivered. It was held that the carrier could successfully discharge the burden of proof only if he could show that the goods were not shipped, not merely that the goods may not possibly have been shipped.

There may be endorsements on the bill of lading with statements such as weight and quantity unknown and the courts recognize these, since information on quantity entered on a bill of lading is based on statements made by the shipper and which does the carrier not normally verify. However, when the statements is contained as ‘ quantity unknown’ alongside the gross weight entered by the shippers for the purposes of Section 4 the weight entered is not a representation that the quantity was shipped.

Example: A bill of lading which states that 11,000 tons of cargo were shipped ‘ quantity unknown’ means that the quantity is unknown and not that that amount of cargo was actually shipped, this would be the meaning construed by the Courts.

According to the Hague/Visby Rules, the shipper can demand the carrier issue a bill of lading showing ‘either the number of packages or pieces, or the quantity, weight etc as furnished in writing by the shipper’. Accordingly, the carrier may use any of these three methods of quantifying cargo. However, he cannot acknowledge one kind and disclaim knowledge of others.

In the case of Oricon v/s Integraan (1967), the bills of lading acknowledged the receipt of 2,000 packages of copra cake said to weigh gross 1,05,000 Kgs for the purposes of calculating freight only. It was held that while each of the bills of lading being Hague Rules of bills of lading, acknowledged the number of packages shipped as a prima facie evidence.

Regarding the evidentiary bill of lading is concerned; the Hague/Visby Rules serve as prima facie evidence of the amount of cargo shipped.

Limitation Period

The time period within which a suit is to be filed before a court of law is generally termed as the ‘Limitation period’. (‘Limitation period’ is to be contrasted from ‘Limitation of Liability’ under maritime law, which is a totally different concept that entitles the ship owner to limit his liability to a specified extent.)

‘Limitation period’ assumes importance because if the said time period is exceeded, the claimant loses his legal right to initiate an action against the defendant based on that claim.

The concept of limitation has been criticized as “an infamous power created by positive law to decrease litigation and encourage dishonest defenses”. But this is not appear to be a sound criticism. The doctrine of Limitation is founded on considerations of public policy and expediency. The object of limitation is to compel litigants to be diligent in seeking remedies in courts of law prohibiting stale claims. In commercial dealings it is highly necessary that matters of title and rights in general should not be in a state of constant uncertainty, doubt and suspense. Interests of commerce require that a period should be put to litigation. Long dormant claims have often more of cruelty than of justice in them.

In India the legal provisions pertaining to the limitation period with respect to claims arising out of contracts of affreightment are found in the Indian Carriage of Goods by Sea Act, 1925 (in short the COGSA). The COGSA substantially follows the provisions of the International Convention for the Unification of certain rules relating to Bills of Lading signed at Brussels in 1924 (commonly known as the Hague Rules). The Hague Rules were amended by two protocols in 1968 and 1979 (commonly known as the Hague-Visby Rules). Though at the international level further developments like the Hamburg Rules were evolved, the Indian law retained the Hague Rules as the norms governing the carriage of goods by sea. Finally in the year 1993 the Indian COGSA was amended by to give effect to the Hague-Visby Rules.

The Indian COGSA as amended by Act 28 of 1993 in Article III Clause 6 lays down the limitation period within which a claim is to be raised and a suit is to be filed for enforcing the claim. The said provision reads as follows:

Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge before or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, or, if the loss or damage be not apparent within three days, such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading.

The notice in writing need not be given if the state of the goods has at the time of their receipt been the subject of joint survey or inspection.

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.

This period may, however, be extended if the parties so agree after the cause of action has arisen:

Provided that a suit may be brought after the expiry of the period of one year referred to in this Sub-paragraph within a further period of not more than three months as allowed by the court; In the case of any actual or apprehended loss or damage, the carrier and the receiver shall give all reasonable facilities to each other for inspection and tallying the goods.

By virtue of the above provision, the limitation period for filing a suit under COGSA in India is one year from the date on which the goods were delivered or ought to have been delivered. As per the sub clause incorporated by the 1993 amendment to make the statute in tandem with the Visby protocol, the said time period of one year could be extended by an agreement between the parties after the cause of action has arisen. Likewise, it has also been provided in the 1993 amendment that a suit may be brought after the expiry of the period of one year within a further period of not more than three months, as allowed by the court. Thus, after the 1993 amendment, subject to the permission granted by the court, the period of limitation for filing the suit under the Carriage of Goods by Sea Act is one year and three months or as agreed to between the parties after the cause of action has arisen.