Holding

The plaintiff failed to prove loss due to perils of the sea; consequently the insurer was not liable and there was no cause of action against Defendant No.3, whose decree was set aside under Order 41 Rule 33 CPC.

Summary

Bihar Supply Syndicate bought salt from United Salt Works and arranged its shipment from Kandla to Calcutta via a chartered vessel. The cargo was insured for Rs 9.5 lakh under a marine policy with Institute Cargo Clauses (FPA) covering warehouse‑to‑warehouse risks. The vessel suffered engine trouble, was towed to Vishakhapatnam, arrested, and the cargo and vessel were sold, yielding Rs 12.5 lakh. The plaintiff claimed the loss as due to perils of the sea and sought recovery from the insurer, also suing the shipowner, charterer and the seller. The trial court decreed in favour of the plaintiff; the High Court dismissed the claim against the insurer, holding no loss due to perils of sea, and upheld the decree against the other defendants. On appeal, the Supreme Court held that the plaintiff bore the burden to prove loss from perils of the sea, which the evidence did not establish, and that the seller had no liability as title had passed and the plaintiff dealt directly with the charterer. Consequently, the appeal by the plaintiff was dismissed, the appeal by the seller was allowed, and the decree against the seller was set aside under Order 41 Rule 33 CPC. The insurer was not liable and each party bore its own costs.

Issues considered

The plaintiff must prove that the loss of the cargo was caused by perils of the sea covered by the marine insurance policy.
Whether the cargo was abandoned and the insurer acquiesced, giving rise to a claim under the policy.
Whether a total loss of the cargo occurred under the terms of the policy.
Whether the plaintiff has a cause of action against the insurer under the marine policy.
Whether the plaintiff has a cause of action against Defendant No.3 (the seller/sub‑charterer) for the loss of the cargo.
Whether the appellate court may exercise its power under Order 41 Rule 33 of the CPC to set aside the trial court decree against Defendant No.3 despite no cross‑objection being filed.

Legislation cited

Code of Civil Procedure, 1908s. Order 41 Rule 22, s. Order 41 Rule 33
Marine Insurance Act, 1963s. 2(a), s. 2(e), s. 3

Subjects

Marine insurancePerils of the seaBurden of proofWarehouse to warehouseOrder 41 Rule 33 CPCCharter partySub‑charterAbandonmentTotal lossInsurer liabilityCause of action

Judgment

BIHAR SUPPLY SYNDICATE A
v.
ASIATIC NAVIGATION AND OTHERS

AND

UNITED SALT WORKS AND INDUSTRIES LTD. B
v.
NATIONAL INSURANCE CO. LTD AND ORS.

MARCH 17, 1993

[N.M. KASLIWAL AND YOGESHWAR DAYAL, JJ.] c

Marine Insurance Ac~ 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 Setr-Burden of Proof on D
Plaintiff.

Code of Civil Procedure, 1908: 0.41 Rule 33.

Scope and applicability of-Ingredients of R. 33-Powers of Court of
Appeal-What are. E
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 F
from Kandla to Calcutta. Defendent No. 2 had inform Defendent No. 3
th11t the Plaintiff is accepted as Sub-Cbarteres. 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, G
and sling loss but excluding war and SRCC risks.

The plaintiff loaded the salt on the said Vessel at Kamila for ship-
ment to Calcutta. The vessel left Kandla and the plaintiff received a telex
message form de{endent No. 2 informing that the vessel was at an
anchorage at Sand-heads near Calcutta and was experiencing engine H
425
-."'II
421i SUPREME COURT REPORTS [1993] 2 S.C.R.

A trouble. The vessel was required to be towed from sand-heads to Vishak-
hapatnam 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 conld 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.
B
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. Consent was given by the plaintiff for the sale of the vessel and the
C cargo. The High Court directed the receiver to sell the vessel along with
the cargo. An amonnt 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
D ended in dismissal.
Plaintiff filed a suit claiming recovery of the loss suffered by h.im,
viz. Rs. 9,50,000. The claim was made against the owner of the vessel, the
charterer and the Insurance Company.
E 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
F 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.

G 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 other-
H wise. {437E)
)
BIHAR SUPPLY v. ASIATIC NEVIGATION 427

1.2. The cables sent by the Master of the ship do not show that sea A
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 >1ith 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 B
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 C
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 \\ith defendent No. 2. The
plaintiff directly paid the freight of the voyage to defendent No.2. The D
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 lit 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 E
trial court against defendent No. 3 \\ithout 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 F
and introduced defendent No. 2, the Charter Party to the plaintiff. The
plaintiff thereafter directly dealt >1ith defendent No. 2 by paying the freight
to defendent No. 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]
G
Choudhary Sahu (dead) by L.Rs. v. State of Bihar, AIR 1982 SC 98;
Mahalll Dhangir and another v. Sl1ri Madan Mohan and Others, AIR 1988
SC 54; Panna/a/ v. State of Bombay and otlters, [1964] 1 SCR 980 and
Giani Ram and othei~ v. Ramji Lal and others, [1969] 3 SCR 944, relied
on. [438H, 439A-G] H
428 SUPREME COURT REPORTS (1993] 2 S.C.R.

A CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4611-
1211992

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.

B Dushyant Dave, Ms. Dipa Dixit, Jitender Singh and K.J. John (For
Swarup John & Co., Advs.) for the Appellant. j.

M.S. Nagolkar, Deepak M. Nargolkar and P.H. Parekh for th<
Respondents.

C The Judgment of the Court was delivered by

YOGESHWAR DAYAL, J. These are two appeals being Nos. 4611 of
1992 and 4612 of 1992 filed by M/s. Bihar Supply Syndicate, plaintiff in the" ~
suit and United Salt Works and Industries Ltd., defendant No.3 in the suit
D respectively1 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
E 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
F \vith 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.
G The plaintiff/appellant is a partnership concern carrying on business
as dealers in salt. Defendent No.I, Mis. 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.l is carrying on business in Bombay through
H its agent. Defendant No.2, namely, M/s. Thakur Shipping Company Ltd. is
B!HAR SUPPLYv. ASIATIC NEVIGATION [DAYAL, J.] 429

a Public Ltd. Company carrying on business of shipping and operate the A
..I/-- vessel Atlas Navigator belonging to Defendant No.l. 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 Bo!llbay
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
B
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 C
Port. Clause 14 of 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 D
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 arran!'" fot
carriage of salt from Kandla to Calcutta as per the Bill of Lading i.'Sucd
in that behalf in favour of the plaintiff. Defendant No.2. had informed the E
defendant No.3 that the plaintiff is accepted as sub-Charteres and neces-
sary 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 F
Calcutta with Institute Cargo Clauses (FPA) cover attached including
warehouse to warehouse risks, including sling loss but excluding war and
SRCC ri.sks. 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 G
Navigator at Kandla for shipment to Calcutta and loading was c,impleted
on July 4, 1972. The vessel left Kandla on July 9, 1972 and on Jul! 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
1 experiencing engine trouble. The plaintiff was informed that the agent of H
\._
430 SUPREME COURT REPORTS [1993] 2 S.C.R.

A 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 daied August 17, 1982 addressed to \
defendant No.l complained about failure to advise movement of the vessel.
B
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
c 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 _L
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
D
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
E 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
sell the cargo also. The plaintiff, as stated earlier, had given the consent to
F 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
G 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 ""'' ••.,.
H plaintiff also ended in dismissal. It was claimed by the plaintiff that they

~

:~
r
,t

BIHAR SUPPLY v. ASIATIC NEVIGATION [DAYAL, J.] 431

~ had informed the Insurance Company about the abandonment of their A
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 N o.l as
owner of the ship was bound to deliver the cargo at Calcutta and having
t. B ,
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 c
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
D
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.
_...._
E
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 F
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. G
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. H

\
432 SUPREME COURT REPORTS [1993] 2 S.C.R.

A 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
.B liability under the policy should arise provided the perils of the sea had .
damaged the cargo as the policy had insured against the perils e~:,.·
.
countered. 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.
c
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 plain~'.ff and defendant No.4 were as under :-
D
"(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
E
any of the perils insured against by the Policy of Insurance
dated 12.7.1972 ?

F
(3) Whether the plaintiffs abandoned the goods as alleged
in para 38 of the plaint ?

(4) Whether the 4th defendants acquiesced in abandon-
-
ment as alleged in paras 35 and 38 of the plaint ?

(5) Whether there was total loss as alleged in para 38 of
the plaint ?
G
(6) What relief, if any ?

The issues settled between the plaintiff and defendant No.3 were as
under :-
·""'·
H "(1) Whether the plaintiffs are a registered partnership

\ ..' - .. .
-~:,f.t"--:..;•
-.~
RIHAR SUPPLY v. ASIATIC NEVIGATION [DAYAL, J.] 433

firm as alleged in para 1 of the plaint ? A

(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 B
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
c
statement?

(5) Whether the plaintiffs are entitled to any relief against
this defendant ? If so, what ?"
D
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, E
United Salt Works and Industries Ltd., (appellant in Civil Appeal No. 4612 .
of 1992) preferred cross-objections on receipt of notice of 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 F
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 \vith costs of the suit.
G
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 ; H
434 SUPREME COURT REPORTS [1993] 2 S.C.R.

A 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 behalfof Defendant
No.2 of Sh. Sentu Vazirmal Ramchandani who had carried out the work
of survey of the damaged vessel at Vishakhapatnam.

B Before the Division Bench it was submitted on behalf of the In-
surance 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
C 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
D 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
E 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
F 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
FP A terms as per the Institute Cargo Clauses (FP A attached) including
G 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
H which inter alia recites that the engine has stopped due to damaged boiler
BIHAR SUPPLY v. ASIATIC NEVIGATION [DAYAL, J.] 435

A. and it fu.rther recites that there is no remedy and sought permission to A
employ 'Fegboat; the second cable dated 21st July, 1972 which stated that
the vessio!' is steaming on power near Sand-heads; the third cable dated
22nd .Jilly, 1972 recited that anchored pilot stationed at Calcutta Port
refosed 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 wa\er and. urgent assistance is required and the last cable dated 25th
B
July, 1972 recjted that the engine room had been flooded and the request
for emergency pump had not received any response. The cable then
mentioned tbai 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 c
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 D
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 E
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 on 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 F
;ii.- 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 unmistakably 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 G
and t :ey took the view that the finding of the trial judge th_at the flooding
of the engine room ,vith 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, H
436 SUPREME COURT REPORTS (1993] 2 S.C.R.

A is a telltale circumstance to establish that there was hardly any damage co .A
the vessel and much Jess due to perils of the sea at Sand-heads 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
B dated 14th March, 1973 made by Erlcoon and Richards (Andhra) (Ext. _;j
'N') which showed that the surveyors boarded the vessel on 12th Marth,
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 was stored in the vessel's five numbers
c 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 Hindus-
D tan 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 Hindus-
E tan 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
F 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 proceed-
ings 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
G the consent to the sale of the cargc. 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
"""
H be the perils of the sea and accordingly gave a finding that the trial judge
BIHAR SUPPLY v. ASIATIC NEVIGATION [DAYAL, J.] 437

was in error in concluding that the plaintiff had established that the loss of A
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
B
Judges of High Court took the view that the expression "warehouse to
warehouse" in the p<'llicy 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 C
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 D
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 inagreement 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 plaintiff to prove the loss due to E
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) ofthe
Marine Insurance Act 1963 (Act No.11 of 1963) (shortly stated the Act) a
11
contract of Marip.e Insurance" means a contract of Marine Insurance as
defined by Section 3. Section 3 defines that a contract of Marine Insurance is F
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 11 is also
defined in the Act under Section 2 and includes any adventure where - (i) any
- insurable prope~ty is exposed to maritime perils; (ii) the earnings or acquisi- G
tion r f any freight, passage money, commission, profit or other pecuniary
benefit, or the security for any advances, loans, or disbursements is en-
dangered 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 H
438 SUPREME COURT REPORTS (1993] 2 S.C.R.

A 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, sei;zures,
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
B
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 finding of the
High Court is that no sea water entered in the e~gine 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
c 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 Wo,rks and
D Industries Ltd., who was defendant No.3 in the suit. It is 'most lmfortimate
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-objec-
tions 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 J:iad been made out
E 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
F 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
G No.3 alongwith the decree against defendants 1, 2 & 4.

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
H Rule 33 of the Code of Civil Procedure were not applicable. The High Court
BIHAR SUPPLYv. ASIATIC NEVIGATION [DAYAL, J.] 439

noticed the decisions of this Court in Choudltary Sa du (dead) by L.Rs. v. State A
of Bihar, AIR 1982 S.C. 98 and Ma/tam 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 inPamtalal
v. State of Bombay and otlters, [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
B

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 c
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 wa> 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
D
Rule 33 of the Code of Civil Procedure. This Court held that the wide
wording of Order 41Rule33 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 41Rule22 did not
do so, the appeal court could under no circumstances give him relief under E
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
F
Court for decision what relief should be granted to the plaintiff under Order
41Rule33 of the Code of Civil Procedure.

The Provisions of Order 41 Rule dealing with the power the appel-
late court of grant relief to parties to suit who have not appealed or filed G
cross-objections came up for consideration before this Court in Giani Ran1
and otlters v. Ramji Lal and others, 11969] 3 SCR 944. The facts of that case
)..
may be noticed. Under the Punjab customary law the female heirs were
not ent.itled 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 H
440 SUPREME COURT REPORTS (1993] 2 S.C.R.

A 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, ,..I..,.
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 fami!y to sue for possession of the
alienated property from the purchaser on the basis of the decree obtained
B 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 ,i..
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.
c 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
D 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
E 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 enlar-
ges the power of a holder of ancestral land or nullifies a decree passed
F 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
G 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
to the alienee was to enure during the life-time of the alienor. The con- _...,
clusion was therefore inevitable that the property alienated reverted to the
H estate of the father at the point of the death and all persons who would,
BIHAR SUPPLY v. ASIATIC NEVIGATION [DAYAL, J.] 441

but for the alienation have taken the estate were entitled to inherit the A
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 thai because in the year 1920 the wife and daughters of the B
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 liecause the widow and daughters had not filed an appeal or cross-ob- c
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 poss"e~sion 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 three sons for the entire D
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 E
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 F
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 G
followed by this Court in Mahan/ Dhangir and another v. Madan Mohan
and others, [1987] (Supp) S.C.C. 528 = AIR 1988 S.C. 54.

,a.. 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 bv the appellate court when cross-objections have been filed by H
~

442 SUPREME COURT REPORTS . [1993] 2 S.C.R.
l
tr
I
A the respondent against a co-respondent. Order 41 Rule 33 of the Code of ,..., I
Civil Procedure reads as under:-
'
"33. Power oi 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
B 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 par-
c ties may not have filed any appeal or objection and may,
where there have been decrees in cross-suits or where two
or niore 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." •
D (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
E
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,

F
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
G 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
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
.
H compass and show total non-liability of defendant No.3 to the claim put
BIHAR SUPPLY v. ASIATIC NEVIGATION [DAYAL, J.] 443

forward by the plaintiff against it. As we have noticed earlier no cause of A
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 B
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 C
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

-