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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) 425  1993 SCC  (2) 639        JT 1993 (2)   396  1993 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 perils of 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  of Court of Appeal--What are.

HEADNOTE: The plaintiff had purchased crushed and uncrushed salt  from Defendent  No.  3 on payment By a  charter  party  agreement Defendent  No. 2, chartered a vessel to Defendent No. 3  for loading salt at Kandla Port in Gujarat and for carrying  the same  to Calcutta Port.  The Plaintiff had directly paid  to Defendent  No. 2 the freight amount for transport  of  cargo from  Kandla  to  Calcutta.   Defendent  No.  2  had  inform Defendent  No.  3  that the Plaintiff is  accepted  as  Sub- Charteres.   The  Plaintiff  had itself  insured  the  cargo through the Insurance Company for Rs. 9,50,000.  The  policy was  for the voyage from Kandla to Calcutta  with  Institute Cargo  Clauses (FPA) cover attached including  warehouse  to warehouse  risks and sling loss but excluding war  and  SRCC risks. The  plaintiff loaded the salt on the said Vessel at  Kandla for  shipment to Calcutta.  The vessel left Kandla  and  the plaintiff  received  a telex message form  defendent  No.  2 informing that the vessel was at an anchorage at  Sand-heads near Calcutta and was experiencing engine 426 trouble.   The  vessel was required to be towed  from  sand- heads  to Vishakhapatnam as repairs could not be  undertaken at  sand-heads.  The plaintiff was informed and it  in  turn informed  the Insurance Company about the said  development. The  vessel could not be repaired as the Hindustan  Shipyard who was to carry out the repairs were not paid the requisite charges by the Owner, Defendent No. 1. The  crew  members  were  not  paid  their  wages  and  they instituted  an  Admirality  Suit in the  High  Court,  which passed  an order arresting the vessel including  cargo  etc. and  appointed  a  Receiver for the vessel  and  the  cargo.

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Consent  was  given  by the plaintiff for the  sale  of  the vessel and the cargo.  The High Court directed the  receiver to  sell  the  vessel along with the cargo.   An  amount  of approximately Rs. 12.5 Lacs was received as sale proceeds of the vessel and the cargo.  The plaintiff approached the High Court  requesting  to  direct the receiver  to  withhold  an amount  of  Rs. 9,50,000 for the benefit  of  the  plaintiff against loss of its goods.  High Court declined to grant the request and the appeal preferred by the plaintiff also ended in dismissal. Plaintiff  filed  a  suit  claiming  recovery  of  the  loss suffered  by  him, viz.  Rs. 9,50,000.  The claim  was  made against  the  owner  of the vessel, the  charterer  and  the Insurance Company. The  Trial Court passed a decree against all the  defendents in the sum of Rs. 10,49,750 i.e. 9,50,000 with interest. On an appeal by the Insurance Company, the Division Bench of the  High  Court dismissed the suit decreed  by  the  Single Judge against the Insurance Company and other defendents. Being aggrieved by the High Court’s judgment, the  plaintiff and  defendent  No.  3 in the  suit  preferred  the  present appeals before this Court. Dismissing  the  appeal of the plaintiff, and  allowing  the appeal of defendent No. 3, this Court, HELD  1.1.  It  is  axiomatic that the  burden  was  on  the plaintiff to prove the loss due to perils of the sea and  on the  facts  of  the case, at no stage,  such  a  burden  was shifted on Insurance Company to prove otherwise. [437E] 427 1.2. The  cables sent by the Master of the ship do not  show that sea water had entered the engine room and it was not  a case  of  loss  of  goods due to perils  of  the  sea.   The expression  "warehouse  to warehouse" merely  indicates  the period during which the policy would remain in force and has nothing to do with the type of the risk policy covered.   It was  not a case of abandonment of the goods because  of  the perils  of the sea.  In fact the plaintiff gave the  consent for  permitting the sale of cargo and to recover  the  value thereof [437B-D] 1.3. Since  the  finding 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. defendent No. 4 was rightly dismissed  by  the High Court. [438B-C] 2.1. The   plaintiff  was  dealing  itself   directly   with defendent No. 2. The plaintiff     directly paid the freight of the voyage to defendent No.2. The plaintiff    took   the Bill  of Lading in its own name itself.  Thus there  was  no cause of action whatsoever against defendent No. 3. [438E] 2.2. On the facts and circumstance of the case in so far  as it  relates  to defendent No, 3, it was a fit case  for  the High  Court to have exercised power under Order 41  Rule  33 C.P.C.  to  set aside the decree passed by the  trial  court against  defendent No. 3 without having discussed any  issue against  defendent No. 3 and to decide the case  itself  The facts  are simple and life in narrow compass and show  total non-liability of defendent No. 3 to the claim put forward by the plaintiff against it.  No cause of action is established against  defendent  No.  3  who  merely  sold  salt  to  the plaintiff and introduced defendent No. 2, the Charter  Party to  the plaintiff.  The plaintiff thereafter  directly  deal with defendent No. 2 by paying the freight to defendent  No.

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2 and by estaining 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. [442G-H, 443A-B] Choudhary, Sahu (dead) by, L.Rs. v. State of Bihar, AIR 1982 SC  98: Mahant Dhangir and another v. Shri Madan  Mohan  and Others,  Al  R 1988 SC 54; Pannalal v. State of  Bombay  and others, [1964] 1 SCR 980 and Giani Rai?? and others v. Ramji Lal and others, [1969] 3 SCR 944, relied on. [438H, 439A-G] 428

JUDGMENT: CIVIL  APPELLATE  JURISDICTION  : Civil  Appeal  No.  4611-- 12/.1992 From the Judgment and Order dated 16/17-1-1992 of the Bombay High 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  the Respondents. The Judgment of the Court was delivered by YOGESHWAR DAYAL, J. These are two appeals being Nos. 4611 of 1992 and 4612 of 1992 riled by M/s.  Bihar Supply Syndicate, plaintiff  in the suit and United Salt Works and  Industries Ltd.,  defendant No.3 in the suit respectively, against  the judgment  of  the High Court of Bombay dated 16th  and  17th January, 1992. By  the  impugned judgment the Division Bench  of  the  High Court,  on  an  appeal, by the  National  Insurance  Company Limited,  defendant  No.4 in the suit, accepted  the  appeal against  the judgment and decree dated 30th September,  1987 passed  by  the  Single Judge in Suit No. 641  of  1973  and dismissed  the suit decreed by the Single Judge  against  it and 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  Civil Appeal No. 4611 of 1992, along with interest on Rs. 9,50,000 at  the  rate  of 12% per annum from 17th  June,  1973  till realisation and costs of the suit. The facts giving rise to the filing of Civil Appeal No. 4611 of 1992 filed by the plaintiff may be noticed. The plaintiff/appellant is a partnership concern carrying on business as dealers in salt.  Defendent No.1, M/s.   Asiatic Navigation Incorporated is a Company incorporated in  United States  and  is  owner  of  vessel  known  as  M.V.   ’Atlas Navigator’.   The vessel is registered at Panama  and  flies the Panama Flag.  Defendant No.1 is carrying on business  in Bombay  through  its  agent.  Defendant  No.2,  namely  M/s. Thakur Shipping Company Ltd. is 429 a Public Ltd.  Company carrying on business of shipping  and operate  the vessel Atlas Navigator belonging  to  Defendant No.1. Defendant No.3, United Salt Works and Industries Ltd., who is appellant in Civil Appeal No. 4612 of 1992 is also  a Ltd.    Company   and  carry  on  business  in   Bombay   as manufacturers, merchants and charterers.  Defendant No.4  is a  General Insurance Company who, after the  nationalisation of  the  General  Insurance business had  succeeded  to  the interest  of the Skandia Insurance Company Ltd.,  a  Company registered in Sweden. By  a  Charter  Party  agreement  dated  17th  June,   1972, Defendant  No.2,  chartered the vessel  Atlas  Navigator  to Defendant  No. 3 for loading salt at Kandla Port in  Gujarat and for carrying on the same to Calcutta Port.  Clause 14 of

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the  agreement  enabled Defendant No.3 to sublet  the  right under the Charter Party agreement and Defendant No.3  sublet the  said right in favour of the plaintiff.   The  plaintiff had  purchased  from Defendant No.3 itself a cargo  of  4434 metric tons of crushed salt at the rate of Rs. 33 per metric ton  and 2741 metric tons of uncrushed salt at the  rate  of Rs.  30  per metric ton and had paid a sum of  Rs.  6,82,000 towards  the  price  of  the salt  of  Defendant  No.3.  The plaintiff  had directly paid to Defendant No.2  the  freight amount of Rs. 3,95,000 for transport of cargo from Kandla to Calcutta.   Defendant  No. 2 had agreed  to  arrant,,,;  for carriage of salt from Kandla to Calcutta as per the Bill  of Lading  issued  in that behalf in favour of  the  plaintiff. Defendant  No.2.  had informed the defendant No.3  that  the plaintiff  is accepted as sub-Charteres and necessary  steps will be taken to inform the plaintiff about the movement  of the  vessel.   The plaintiff had itself  insured  the  cargo through  Skandia  Insurance Company  against  the  Insurance Policy  dated  12th July, 1972 and the sum insured  was  Rs. 9,50,000.   The  policy was for the Voyage  from  Kandla  to Calcutta  with Institute Cargo Clauses (FPA) cover  attached including warehouse to warehouse risks, including sling loss but  excluding  war and SRCC risks.  Defendant No.4  is  the successor  to  the  Skandia  Insurance  Company,  as  stated earlier. The  plaintiff loaded 7165 metric tons of salt on  the  said Atlas  Navigator  at  Kandla for shipment  to  Calcutta  and loading  was  completed on July 4, 1972.   The  vessel  left Kandla on July 9, 1972 and on July,  28, 1972 the  plaintiff received a telex message from defendant No.2 informing  that the vessel was at, an anchorage at Sand-heads near  Calcutta and  was  experiencing engine trouble.   The  plaintiff  was informed that the agent of 430 the  vessel would be communicated from time to  time.   M/s. Shaw Wallace and Company who is the agent of defendant  No.2 informed  the plaintiff on July 28, 1972 that the  discharge of  the  vessel will be commenced only after  the  plaintiff provided with usual General Average Bond in lieu of the cash deposit.  The plaintiff by its letter dated August 17,  1982 addressed  to  defendant No.1 complained  about  failure  to advise  movement of the vessel.  The vessel was required  to be towed from Sand-heads to Vishakhapatnam as repairs  could not be undertaken at Sand-heads.  The plaintiff became aware of the said facts.  Defendant No.2 addressed a letter  dated August 18, 1972 to one R.Ramos of Hexagon Shipping Ltd.  and endorsed  a  copy to the plaintiff.  The letter  inter  alia recited  that  the vessel had been diverted to  Vizag  along with  the  cargo under tow.  The plaintiff claimed  to  have informed the Insurance Company about the above  development. The  repairs  to. the vessel were expected to  be  completed shortly and vessel was expected to be back in Calcutta  with cargo.   The vessel could not be repaired as  the  Hindustan Shipyards who was to carry on the repairs were not paid  the requisite charges by the owner, Defendant No.1. The  vessel was neither repaired nor the wages of  the  crew members  were  paid with the result that  the  crew  members instituted Admirality Suit No.1 of 1973 in the High Court of Judicature,  Andhra Pradesh at Hyderabad.  On  February  13, 1973  the  Court  passed  an  order  arresting  the   vessel including cargo etc. and appointed a Receiver for the vessel and  the cargo.  The consent was given by the  plaintiff  to the  sale of the vessel and the cargo and the  vessel  along with  the cargo was sold by order of the Court on March  27, 1973.  The order of the High Court directed the Receiver  to

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sell the cargo also.  The plaintiff, as stated earlier,  had given the consent to sell the cargo.  The consent was  given by the plaintiff as it was found that the costs of unloading the cargo from the damaged vessel was more than the value of the  cargo  itself.  Subsequently, the  plaintiff  tried  to withdraw  the consent but the Receiver had by that time  not only  obtained the order for sale of the vessel  along  with cargo  but  had  also auctioned the vessel  along  with  the cargo.  An amount of approximately Rs.12.5 lacs was received as sale proceeds of the vessel and the cargo.  The plaintiff then  approached  the Andhra Pradesh High  Court  requesting that the Receiver should be directed to withhold the  amount of Rs. 9,50,000 out of the sale proceeds for the benefit  of the plaintiff.  The High Court of Andhra Pradesh declined to grant the request and the appeal preferred by the  plaintiff also  ended in dismissal.  It was claimed by  the  plaintiff that they 431 had informed the Insurance Company about the abandonment  of their  right  in respect of the Cargo due  to  inability  to reclaim the cargo from the damaged vessel. On these averments the plaintiff claimed that defendant No.1 as  owner  of  the ship was bound to deliver  the  cargo  at Calcutta  and having failed to do so was required to pay  to the  plaintiff  the market value of the goods  estimated  at Rs.9,50,000. The plaintiff claimed that defendant No. 2  who was the charterers and operators of the vessel and defendant No.  3 as sub-charterer are bound and liable to pay  to  the plaintiff value of the goods estimated at Rs. 9,50,000.   In paragraph  38 of plaint it was averred that  defendant  No.4 had insured under the policy goods from warehouse Kandla  to warehouse Calcutta.  The plaintiff claimed that as the goods were  not delivered to the plaintiff at Calcutta and as  the expenses incidental to reshipment to Calcutta were much more than  the  insured value, the goods were deemed  to  be  the total  loss.   The  plaintiff claimed that  the  goods  were abandoned and notice was given to the Insurance Company  and the  Company had acquiesced in and accepted the  abandonment of  the cargo by the plaintiff in favour of defendant  No.4. The  plaintiff claimed that as they had suffered a  loss  of Rs.9,50,000 the Insurance Company was bound to reimburse the claim  to  the  extent of Rs.9,50,000  under  the  Insurance Policy. Defendant  No.1,  the  owner of the ship did  not  file  the written  statement and trial against it proceeded  ex-parte. Defendant  No.2, the charterer filed its  written  statement claiming  that the master of the vessel intimated  that  the engine  room of the vessel was flooded and vessel was  in  a dangerous  condition  and  the  crew  was  standing  by  for abandoning  the ship.  Defendant No.2 claimed that they  are not  liable  for the claim made in the suit in view  of  the terms  and  condition of the Charter Party and the  Bill  of Lading.   Defendant  No.3 by its written  statement  claimed that defendant No.2 had accepted the sub-letting in terms of clause   14   of   Charter  Party   and   all   rights   and responsibilities  of  defendant  No.3  had  passed  to   the plaintiff  and  no cause of action arose  against  defendant No.3. Defendant No.3 had also pleaded that the plaintiff had directly paid the freight to defendant No.2 and consequently the  liability,  if any, was of defendant No.2  and  not  of defendant  No.3. Defendant No.3 also claimed that the  title of the cargo was passed to the plaintiff and defendant  No.3 had  nothing  to  do  with  the  non-delivery  of  cargo  at Calcutta. 432

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Defendant  No.4,  the Insurance Company, filed  its  written statement  claiming  that the plaint did  not  disclose  any cause  of action against the Insurance  Company.   Defendant No.4 also pleaded that the plaintiff had not even averred in the  plaint  that  the owner of the vessel  had  advised  of abandoning   of   frustration  of  voyage  and   under   the circumstances  no  claim  under the policy  could  be  made. Defendant  No.4  then pleaded that the liability  under  the policy  should  arise  provided the perils of  the  sea  had damaged  the  cargo as the policy had  insured  against  the perils  encountered.  The Insurance Company denied that  the Cargo  was  deemed  to be lost and that  the  plaintiff  had abandoned the cargo and the Insurance Company had acquiesced or accepted the alleged abandonment. On these pleadings the learned trial court settled  separate issues between the plaintiff and defendant No.2; as many  as five  issues  between  the  plaintiff  and  defendant   No.3 (appellant  in  Civil Appeal No. 4612 of 1992)  and  between plaintiff and defendant No.4. The issues settled between the plaintiff and defendant No.4 were as under :-               "(1) Whether the plaint does not disclose  any               cause of action against the 4th defendants  as               alleged in para 1 of, the written statement ?               (2)   Whether the plaintiffs have suffered any               loss due to any of the perils insured  against               by the Policy of Insurance dated 12.7.1972 ?               (3)   Whether  the  plaintiffs  abandoned  the               goods as alleged in para 38 of the plaint ?               (4)   Whether the 4th defendants acquiesced in               abandonment  as alleged in paras 35 and 38  of               the plaint ?               (5)   Whether there was total loss as  alleged               in para 38 of the    plaint ?               (6)   What relief, if any ?               The  issues settled between the plaintiff  and               defendant No.3 were as under :-               (1)   Whether the plaintiffs are a  registered               partnership               433               firm as alleged in para 1 of the plaint ?               (2)   Whether  the plaint discloses any  cause               of action as against this defendant as alleged               in para 31 of the written statement ?               (3)   Whether  this  defendant was  liable  as               sub-charterers  to  pay  the  plaintiffs   the               market  value  of the said goods  at  Calcutta               being Rs.9,50,000 as set out in Ex.’E’ of  any               part  thereof  as  alleged in para  3  of  the               plaint ?               (4)   Whether this defendant is absolved  from               all  liabilities of the plaintiffs as  alleged               in para 28 of the written statement ?               (5)   Whether  the plaintiffs are entitled  to               any  relief  against this defendant ?  If  so,               what ?" The trial court, as stated earlier, decreed the suit of  the plaintiff  against all the four defendants.  In the  present appeals  before us we are not concerned with the  rights  of the  plaintiff vis-a-vis defendants 1 and 2 as defendants  1 and 2 did not prefer any appeal against the decision of  the trial  court.   The  defendant No.4,  namely  the  Insurance Company,  filed the appeal before the Division of  the  High Court   whereas  defendent  No.3,  United  Salt  Works   and Industries  Ltd.,  (appellant in Civil Appeal  No.  4612  of 1992)  preferred  cross-objections on receipt of  notice  of

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appeal  filed by M/s.  National Insurance Company Ltd.   The trial  court while decreeing the suit against the  Insurance Company  held issue numbers 1, 2, 3 in the  affirmative,  in favour of the plaintiff and against defendant No.4. On issue No.4 he held that it was not necessary.  Issue No.5 was also answered in the affirmative and issue No.6 as per the order. Consequently  the  trial  court decreed  the  claim  of  the plaintiff  against  all  the defendants in the  sum  of  Rs. 10,49750 with interest on Rs. 9,50,000 at the rate of 12 per cent  per annum from 17th June, 1973 till  realisation  with costs of the suit. It  is curious that though the trial court found  issues  as settled  between  the plaintiff and defendant  No.3  against defendant  No.3  but there is no discussion at  all  in  the trial  court judgment for various findings recorded  against defendant  No.3.  On  appeal by the  Insurance  Company  the Division  Bench of the Bombay High court examined  the  oral evidence 434 led  by  the  Insurance Company  of  its  Assistant  General Manager Shri Dhirubhai A. Shah and one of its employee  Shri Mangaldas Keshavji Jagad.  The Division Bench also  examined the  evidence led on behalf of Defendant No.2 of Sh.   Sentu Vazirmal Ramchandani who had carried out the work of  survey of the damaged vessel at Vishakhapatnam. Before the Division Bench it was submitted on behalf of  the Insurance  Company  No.4, that its liability arises  out  of Marine Insurance Policy and the plaintiff cannot succeed  in obtaining a decree against it unless it is established  that the  goods  were  lost due to perils of  the  sea.   It  was submitted  on  its behalf that the plaintiff  had  not  even averred  in  the plaint that the goods were damaged  due  to perils  of  the sea.  It was also submitted that  the  trial court   entirely  misconstrued  the  terms  of  policy   and erroneously concluded that the loss was caused due to perils of  the  sea.  It was submitted on behalf of  the  Insurance Company  that the trial court was in error in assuming  that the  term  in  the  policy that the  risk  is  covered  from warehouse  to  warehouse means that the  policy  covers  all kinds of risks to the vessel and the goods. On  behalf  of the plaintiff/respondent No.1 in  the  appeal before  the High Court, it was submitted on the  other  hand that the finding of the trial court that the loss was caused due to perils of the sea justified.  It was also pleaded  in the  alternative  that  the policy covered  all  risks  from warehouse at Vishakhapatnam to warehouse at Calcutta and  as there  was constructive loss of all the goods the  plaintiff was entitled to a decree. In view of these rival contentions, the High Court felt that the  question which falls for determination is  whether  the plaintiff  has  suffered loss due to any perils of  the  sea insured  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  of insurance  was subjected to FPA terms as per  the  Institute Cargo   Clauses  (FPA  attached)  including   warehouse   to warehouse  risks.  It also found that the "plain reading  of the  policy  makes it clear that claim under the  policy  is permissible  provided the insured establishes that the  loss was  caused due to perils of the sea".  Thereafter the  High Court  examined four cables on which the plaintiff relied namely the cable dated 19th July, 1972 sent by the master of ship  which inter alia recites that the engine  has  stopped due to damaged boiler

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435 and  it further  recites that there is no remedy  and sought permission  to employ Tegboat; the second cable  dated  21st July, 1972 which stated that the vessel is steaming on power near  Sand-heads;  the  third cable dated  22nd  July,  1972 recited  that  anchored  pilot stationed  at  Calcutta  Port refused  to  bring  the  vessel in  the  Port  due  to  non- availability  of  the engine power and  steamer  power;  the cable  then recited that there is no provision of Water  and urgent assistance is required and the last cable dated  25th July,  1972 rejected that the engine room had  been  flooded and  the  request for emergency pump had  not  received  any response.   The cable then mentioned that the  generator  is likely  to  shut out any time and the situation  has  become very  dangerous  and crew had been ordered to stand  by  for abandoning  the  ship.  The learned Judges of  the  Division Bench  noticed that from the contents of theses four  cables the  trial judge came to the conclusion that the vessel  had suffered  casualty on account of the damage to  the  machine and  the  engine and the main boiler not  functioning.   The High  Court further noticed that trial judge felt  that  the cables disclosed that initially there was engine trouble due to  damage  to  the boiler but later  the  engine  room  was flooded and that had resulted in the condition of the vessel becoming  very  dangerous  so  much so  that  the  crew  was standing  by for abandoning the vessel.  The Division  Bench also  noticed that the finding of the trial court  that  the flooding  of  the engine room could not have  been  possible except  from  the  sea  water.   The  Division  Bench   felt difficulty  in  appreciating on what basis the  trial  judge proceeded  to draw such an inference.  After  examining  the contents of the four cables the Division Bench took the view that  the contents of the cables no where disclose that  the water which entered the engine room was the sea water.   The High  Court  felt that it was a matter of  common  knowledge that  the water is stored an the vessel for the  purpose  of ballast.   The  learned Judges felt that the  trial  judge’s finding that the engine room was flooded with sea water  and therefore  the vessel had suffered by perils of the sea  was erroneous.   The learned Judges of the Division  Bench  felt that  the  trial judge had overlooked that the  evidence  on record  urmistakably establishes that the vessel  was  towed back to Vishakhapatnam; was ultimately arrested by the order of the Andhra Pradesh High Court and was sold along with the cargo  and they took the view that the finding of the  trial judge that the flooding of the engine room with sea water is without  any  basis.   The  High  Court  observed "’it  is nobody’s case that the vessel was leaking and the sea  water had  flooded in the vessel.  The fact that the vessel  could be towed back to Vishakhapatnam and was available for  being arrested and sold in auction, 436 is  a  telltale  circumstance to establish  that  there  was hardly any damage to the vessel and much less due to  perils of  the  sea at Sand-sea near Calcutta Port." On  the  other hand  the High Court gave a finding that there  is  positive evidence  to establish that sea water had never  entered  in the  vessel  at  any time and the cargo had  not  even  been damaged.  The Division Bench also examined the survey report produced by the plaintiff itself dated 14th March, 1973 made by  Erlcoon and Richards (Andhra) (Ext.  IN,)  which  showed that  the surveyors boarded the vessel on 12th  March,  1973 while  it was lying alongside J-3 berth,  Vishakhapatnam  in order to inspect and ascertain the condition of the cargo on board.  The report  establishes that the bulk cargo of  salt

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was stored in the vessel’s five numbers hatches and the same was found in apparent good condition throughout.  The   High Court thus gave a finding that the vessel and the cargo  had not  suffered due to perils of the sea. The High Court  also on  examination of the evidence of Shri R.C. Walia,  partner of  the  plaintiff clearly gave  another finding  that  "the case put forward by the plaintiff was that the    vessel was towed  back  to  Vishakhapatnam  for  effective  repairs  by Hindustan  Shipyards. Walia in  examination-in-chief  stated that  the  vessel  reached  Sand-heads  near  Calcutta   and suffered from engine trouble and therefore  could not  reach Calcutta   Port.   Walia  further  stated  that   the   Port Authorities did-not permit the vessel to enter the Port  and the  vessel had  to be towed to Vishakhapatnam  for  repair. Walia  then stated "the Hindustan Shipyard tried  to  repair the  ship  but  as  the defendant No.1  did  not   give  the necessary   funds   the  vessels  could  not   be   repaired ultimately. In      the  meantime the Master of  the  vessel and  crew were not paid their wages for which they  filed  a suit in the Andhra Pradesh High Court. Thereafter the vessel and  the cargo were sold." The engine and the boiler of  the vessel    failed  possibly because of non-repair and it  was not the liability of the Insurance Company to reimburse  the plaintiff  for the loss of the goods because of  failure  of the  owner of the vehicle of incur expenses for  repair   of the ship. Thereafter the High Court also noticed that  after the proceedings had been lodged  by the Master and the  crew members in the Andhra    Pradesh  High Court for arrest  and sale  of the vessel, the plaintiff had given the consent  to the  sale  of  the carge. The High  Court  accordingly  gave further  finding that "it is therefore futile for  plaintiff now  to  claim that the cargo was abandoned because  of  the inability  to salvage it without incurring  expenses  higher than  the  value of the cargo itself." The High  Court  felt that      the failure to carry out repairs can by no stretch of  imagination  be said to   be the perils of the  sea  and accordingly gave a finding that the trial judge 437 was   in  error  in  concluding  that  the   plaintiff   had established that the loss of the cargo was due to perils  of the sea. We  have gone through the evidence on record  including  the four cables mentioned earlier.  We are in complete agreement with the Division Bench of the High Court that the cables do not  show that sea water had entered the engine room and  it was  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  the time during which the policy would remain in force and by no stretch  of imagination can be interpreted as covering  each and every risk.  We are also in agreement with the  Division Bench  of  the  High Court  that  expression  "warehouse  to warehouse"  merely  indicates the period  during  which  the policy would remain in force and has nothing to do about the type of the risk policy covered. The  policy  remained a typical Marine  Voyage  Policy  with Institute Cargo Clauses (FPA) and in the absence of loss due to perils of the sea, the Insurance Company was not  liable. We  are  also in agreement with the view of the  High  Court that  it was not a case of abandonment of the goods  because of the perils of the sea.  We are also in agreement with the view of the High Court that it was not a case of abandonment of  the goods.  In fact the plaintiff gave the  consent  for permitting  the  sale  of cargo and  to  recover  the  value thereof  It.  is  axiomatic  that  the  burden  was  on  the

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plaintiff to prove the loss due to perils of the sea and  on the  facts  of  the case, at no stage,  such  a  burden  was shifted  on  Insurance Company to  prove  otherwise.   Under Section 2(a) of the Marine Insurance-Act 1963 (Act No.11  of 1963)  (shortly  stated  the  Act)  a  "contract  of  Marine Insurance"  means a contract of Marine Insurance as  defined by  Section 3. Section 3 defines that a contract  of  Marine Insurance is an agreement whereby the insurer undertakes  to indemnify  the  assured,  in the manner and  to  the  extent thereby  agreed, against marine losses, that is to  say  the losses  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, 2 & 4.

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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

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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

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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

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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