BRITISH INDIA STEAM NAVIGATION CO., LTD. versus SHANMUGHA VILAS CASHEW INDUSTRIES AND ORS.

Citation: [1990] 1 S.C.R. 884 · Decided: 13-03-1990 · Supreme Court of India · Bench: K.N. SAIKIA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

A 
B 
BRITISH INDIA STEAM NAVIGATION CO., LTD. 
v. 
SHANMUGHA VILAS CASHEW INDUSTRIES AND ORS. 
MARCH 13, 1990 
[K.N. SAIKIA AND P.B. SAWANT, JJ.] 
Indian Bill of Lading Act, 1856: Bill of Lading-Negotiation a/-
Contract of affreightment need not be expressed in writing; agreed 
jurisdiction of a court and choice of law binding on the parties; no 
submission to the jurisdiction of another court if appearance only to 
C 
protest. 
D 
The Indian Carriage of Goods by Sea Act, 1925 Contract of 
affreightment-'Voyage charterparty' 'time charterparty'; responsibility 
of the charterer vis-a-vis the owner to be ascertained from the charter-
party and the bill of lading. 
The first respondent, M/s Shanmughavilas Cashew Industries, 
shipped 4445 bags of raw cashewnuts from East Africa to Cochin in the 
vessel Steliosm chartered by the appellant M/s British India Steam 
Navigation Co. Ltd., incorporated in England, pursuant to a contract '!f 
affreightment evidenced by three bills of lading. But only 3712 bags 
E 
were delivered at Cochin, there being thus short landing of 733 bags. 
F 
The first respondent sued the appellant in the Court of the Sub-
ordinate Judge, Cochin, seeking. damages. The Subordinate Judge 
decreed the suit with interest. The appellant's appeal to the High Court 
failed. 
In the courts below the main contentions of the appellant were 
-""( 
that it was a mere charterer of the vessel; that there was a charterparty 
executed between the first respondent and the agent of the owner in 
London; that as per clause 3 of the bill of lading the Court at Cochin had 
no jurisdiction and only English Courts had jurisdiction; and that as 
G 
per the charterparty and clause 4 of the bill of lading the remedy of the 
first respondent, if any, was against the owner who alone was liable and 
j 
not against the appellant charterer of the vessel. 
J
The first respondent had denied that the appellant was only a 
charterer and not liable for the shortage. It had also denied that only 
H English Courts had jurisdiction in the matter. 
884 
INDIA STEAM NA VIGATJON v. SHANMUGHA VILAS 
885 
Before this Court, on behalf of the appellant it was submitted that 
the appellant was an English company registered in England carrying 
on business· iii England, and it did not carry on any business in India; a~ 
the carrier under clause 3 of the bill of lading, only the appellant had an 
option either to sue or be sued in England, or in Cochin, which was a 
port of destination, but the shipper had no option to sue at Cochin; in its 
written statement it was clearly stated that it had appeared under pro-
test and without prejudice to the contention regarding jurisdiction 
which contention it had also pressed at the time of the argument, and, 
therefore, it could not be said to have submitted to the jurisdiction of 
Cochin court as it never made any submission or raised any objection as 
to the fact of short landing; and that the High Court has held clause 3 of 
the bill of lading to be bad on two erroneous grounds, namely, that it 
offends section 28 of the Contract Act and that it gives an unfair 
advantage to the carrier which advantage is not given to the consignee. 
Allowing the appeal and remanding the case to the trial Court it 
was, 
HELD: (1) A bill oflading !s the symbol of the goods, and the right 
to possess these passes to the transferee of the bill of lading, and the 
right to sue passes with it. [893C] 
Sewell v. Burdick, (1884] IO App. Cases 74 (85, 104), referred to. 
(2) A bill of lading is intended to provide for the rights and 
liabilities of the parties arising out of the contract of affreightmeni. If a 
consignee claims the goods under a bill of lading, he is bound by its 
terms. (904C] 
A 
B 
c 
D 
E 
(3) Tbe property in the cargo passes to the consignee or the 
F 
endorsee of the bill of lading but the contract whereunder the con-
signment or endorsement is made has always to be taken into consi-
deration. Thus the consignee or endorsee gets only such rights as its 
consignor or endorser bad in respect of the goods mentioned in the bill 
of lading. (904C-DJ 
( 4) The jurisdiction of the Court may be decided upon the parties 
themselves on the basis of various connecting factors, and the parties 
should be bound by the jurisdiction clause to which they have agreed 
unless there is some strong reason to the contrary. (897B; 899F) 
G 
( 5) The first respondent is the consignee and holder of the bills of 
H 
886 
SUPREME

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