ORDER
K.N. Keshavanarayan, J.
1. As common questions of fact and law arise for consideration in all these revision petitions, they were heard together and are being disposed of by this common judgment
2. All these revision petitions are filed under Section 18 of the Karnataka Small Causes Courts' Act, against the judgment and decree passed by the Court of Small Causes, Bangalore. Facts leading to the presentation of these revision petitions are as under:
Hindusthan Aeronautics Limited (for short HAL), a Government of India Undertaking imported certain spare parts for its Aircraft Division from foreign suppliers. These goods were duly insured with the United India Insurance Company Ltd., (for short Insurer). The imported goods landed in Bangalore Airport on 4.6.2000. The Mysore Sales International Limited, (for short MSIL) had been appointed as a custodian under Section 45(1) of the Customs Act (hereinafter referred to as the Act) in respect of the goods imported and landed in Bangalore Airport which has been duly notified as a Customs Airport, as required under Section 7 of the Act. The goods imported by HAL which reached Bangalore Airport on 4.6.2000 came to the custody of the MSIL on the same day. The Air Cargo Complex maintained and managed by MSIL had been notified as customs area within the meaning of Section 2(11) of the Act, as, such goods are required to be stored in the custom area only. The goods imported by HAL and stored in the Air Cargo Complex maintained by the MSIL, was destroyed in a fire accident that occurred on 5.6.2000. Thereafter, the Importer viz., HAL secured non delivery certificate from the custodian MSIL and lodged its claim with its Insurer. The Insurer, after satisfying itself about the correctness of the claim and also the destruction of the imported goods in a fire accident while in possession of the custodian viz., MSIL, satisfied the claim of the HAL. At the same time, the Insurer obtained a letter of subrogation from the HAL to claim damages from the person responsible for the destruction of the imported goods. Thereafter, the Insurer issued notices to the MSIL calling upon the MSIL to compensate the value of the goods imported by HAL which were destroyed in the fire accident.
3. The MSIL refuted the claim inter alia contending that there is no privity of contract between it and the Importer or the Insurer and therefore, it is not liable to pay any damages. It also contended that as per the public notice issued by the customs authority, its liability is limited only to 20 U.S.Dollars per Kilogram or the value of the imported goods whichever is less and if the MSIL is held to be liable, its liability is limited only to that extent. It also contended that though it was appointed as the custodian under Section 45(1) of the Act, the Customs Authority had the complete control over the goods as such it is not liable for payment of any damages to the importer. Upon receipt of the reply from the MSIL, the Insurer as well as Importer filed suits in S.C. Nos. 1087/03, 2326-2327/03, 1080-1086,1088-1089/03, 226/04, 280/04, 359-365/04, 417/04, 459 and 460/04, initially only against MSIL seeking decree for recovery of the value of the goods with interest. The MSIL, upon service of suit summons in all those cases appeared before the respective courts and contested the matter reiterating its stand which it had taken in its reply notice. It also contended that the suits are bad for non joinder of necessary parties viz., the customs authority. In the light of the said defence, the plaintiffs by complying with requirement of Section 155(2) of the Act, by issuing notice to the customs authority, filed applications to implead customs authority. The applications were allowed and the Commissioner for Customs as well as Addl. Commissioner for Customs were impleaded as defendants 2 and 3.
4. Upon appearance, defendants 2 and 3 filed written statement contending inter alia, that there is no privity of contract between them on one hand and the Importer or the Insurer of the imported goods on the other and therefore, they are not answerable for any claim. They further contended that the goods were in custody of the MSIL as custodian and the Customs Department had no control over the imported goods and since goods were in possession of the custodian when it was destroyed,. the customs authority have no liability and they are not answerable for the loss. They also contended that the custodian alone is answerable for the claim.
5. Thereafter, the parties let-in evidence. One suit viz., SC 1087/2003 was pending before 1st Addl. Judge, Court of Small Causes while remaining 23 suits were pending before the III Addl. Judge, Court of Small Causes, Bangalore, The learned 1st Addl. Judge, Court of Small Causes, disposed of the said suit in SC 1087/2003 by judgment and decree dated 29.10.2004. The learned Judge, on consideration of the oral and documentary evidence and also various provisions of the Act, held that both custodian as well as customs authority are jointly and severally liable to pay the value of the imported goods to the Insurer which had satisfied the claim of the Importer, together with interest at 6% from the date of suit till the date of realization.
6. Being aggrieved by the said judgment and decree, the MSIL has filed CRP 294/2005 questioning the judgment and decree holding it liable for answering the claim of the plaintiffs. Customs Authorities also questioned the correctness of said judgment by filing CRP 126/05. Thus the first two revision petitions viz., CRP 126 and 294/2005 relate to judgment and decree in S.C. 1087/03. Subsequently, a copy of the judgment in S.C. 1087/03 was produced before the III Addl. Judge, Court of Small Causes, before whom the other cases were pending. However, though an attempt was made to club all those 23 cases and to lead common evidence, it was not accepted, Therefore, independent evidence was let-in, in all the cases by marking the original of the documents in one case and copies thereof in other cases. Ultimately, the cases were disposed of by independent but identical judgment dated 31.5.2007 wherein the learned Judge held that the customs authorities are not responsible for answering the claim of the plaintiffs and as the goods were in possession and control of the custodian viz., MSIL as on the date of its destruction, the MSIL alone is answerable to the claim of the plaintiffs. In that view of the matter, the learned Judge decreed the suit of the plaintiffs in part, only against defendant-1 viz., MSIL and dismissed the suits against Customs Authority, defendants 2 and 3. Against that part of the decree passed against MSIL in each of these cases, MSIL has preferred 23 revision petitions in CRP 614 to 621/07 and 623/07 to 637/2007. As against the dismissal of the suits against defendants 2 and 3, the insurer as well as importer have jointly filed 23 revision petitions CRP 586 to 609/2007. In the light of the above facts and since all these revision petitions involve the same questions of fact and law, they are being disposed of by this common judgment.
7. I have heard Sri. B.C. Seetharama Rao, learned Counsel appearing for the plaintiffs, namely, Importer and the Insurer, Smt. Yovini Rajesh, learned Counsel appearing for MSIL and Sri Aravind Kumar, learned Asst. Solicitor General appearing for Customs Authority, defendants 2 and 3.
8. Sri. B.C. Seetharama Rao, learned Counsel for the petitioners would submit that, having regard to the provisions of the Customs Act all imported goods would first land in the custom area and such imported goods would be handled by customs authorities by themselves or they may entrust the same to an agency till all the formalities are cleared and released to importer, as such, the Customs Authorities would be the principal while the custodian appointed as per Section 45(1) is only an agent. Therefore, the principal is responsible for the acts of the agent, as such, the Court below ought to have granted decree against all the three defendants jointly and severally. Therefore, he submitted that the judgment and decree passed by the I Additional Judge in S.C. No. 1087/2003 decreeing the suit against all the three defendants jointly and severally is in accordance with law and it does not call for any interference by this Court. In respect of the decrees passed in the remaining 23 cases, he submitted that the decree passed by the Court below required to be modified and all the three defendants should be held liable jointly and severally for the claim of the plaintiffs. He would further submit that assuming for the purpose of argument, there is some kind of arrangement between the Customs Authorities and Custodian restricting the liability of the custodian, it would not bind the plaintiff. He further submitted that all the imported goods are deemed to be in the custody of the Customs Authority till they are cleared by Customs Authority, and if any loss occurs during that period, the Customs Authorities are answerable as the principal. He would further submit that Section 45(2)(b) as well as Section 141 of the Act clearly indicate that the Customs Authorities have complete control over the imported goods even in the custody of the custodian, as such, the Customs Department is also liable to answer the claim. Therefore, he contended that the suits ought to have been decreed against Defendants- 1 to 3 jointly and severally.
9. Smt. Yovini Rajesh Rohra would submit that the Custodian is a Statutory creation under Section 45(1) of the Act and it works under the complete control of the Customs Authority and the custody of the imported goods with the custodian is only as stop gap arrangement till the Customs Authorities clear the goods either for home consumption or for warehousing, therefore, in the event of any loss or damage to the imported goods during the custody of such goods with the custodian, the Customs Authorities are answerable and by virtue of the public notice dated 10.10.1984, the liability of the custodian is limited to 20 U.S. Dollars per Kg. or to the extent of the value of imported goods, whichever is less. She would submit that such public notice has been Gezetted and therefore, it has the binding force against all including the plaintiffs and the Customs Authorities, as such, the decree passed by the Court below fastening the entire liability on the custodian is illegal and contrary to the law. She would further submit that since as per the provisions of the Customs Act, the imported goods from the moment it lands in the customs area, would land in the hands of the Customs Authorities, who in turn by virtue of an arrangement made, deliver the same to the custodian, for storage till cleared for home consumption or warehousing, as such, there is no privity of contract between the importer and the custodian. Therefore, the custodian is not liable to answer the claim of the importer or its insurer. Therefore, she sought for setting aside the decree passed against the custodian in all these suits and seeks for dismissal of the suits against MSIL.
10. Sri. Arvind Kumar, learned Assistant Solicitor General appearing for the Customs Authorities, sought to support the reasonings of the learned III Additional Judge, Court of Small Causes while dismissing the suits against Defendants - 2 and 3. He contended that there is no error committed by the said Court in dismissing the suits against Defendants- 2 and 3, and there is no ground to interfere with the said findings. He would further submit that there is no relationship of Principal and Agent between the Customs Authority and MSIL and since MSIL, as custodian gets commission for their services rendered, the custodian is exclusively liable for any loss or damage to the goods while in their custody. According to the learned Counsel, the customs department will not be in custody and control of the goods imported and except for collection of duty, the Customs Department has no other role to play and at no stage, the Customs Authorities would have any control over the imported goods. Placing reliance on the provisions of Section 45(3) of the Act, he would submit that the said provision provides for payment of duty by the custodian to the Customs Department in respect of goods pilfered and this indicates that the Customs Authorities would not be in control of the goods stored in the customs area by the custodian. He also drew attention of the Court to the provisions of Section 48 of the Act, which empowers the custodian to sell the goods not cleared or warehoused or transhipped within 30 days after unloading. According to the learned Counsel, this provision further makes it clear that the Customs Authorities have no control over the goods and they have no role to play on their own except for collection of the customs duty, as such, the Customs Department is not liable for the damages caused to the imported goods while in possession of the custodian. He would further submit that Section 141 of the Act would deal with the general supervision and not specifically with regard to the control of the imported goods in the possession of the custodian, as such, the said provision will have no application to the facts of this case. He placed reliance on Section 62 of the Act, which indicates that, all warehoused goods shall be subject to the control of Proper Officer. Whereas similar provisions are not available with regard to the possession of the imported goods with the custodian appointed under Section 45(1) of the Act and therefore, the Customs Authorities are not liable to answer the claim of the plaintiffs in these cases, as such, the Court below has rightly dismissed the suits against the Customs Authorities. With regard to decree passed in O.S. No. 1087 of 2003, he submitted that the said judgment is illegal and contrary to the provisions of the Customs Act, as such, it is liable to be set aside.
11. The undisputed facts are, the Defendant-MSIL at the relevant point of time was custodian appointed under Section 45(1) of the Act in respect of the imported goods landing at Bangalore Airport The goods imported by HAL landed in the Bangalore Airport, which is a Customs Airport notified under Section 7 of the Act on 04.06.2000. The imported goods were given to the possession of the custodian on the very same day. On 05.06.2000 those imported goods kept in Air Cargo Complex managed by the Custodian were destroyed in a fire accident.
12. In the light of the aforesaid undisputed facts, and in the light of the submissions made by the learned Counsel appearing for the respective parties, the questions required to be considered by this Court in these Revision Petitions are: whether the custodian alone or the Customs Authorities alone are liable to answer the claim of the plaintiffs or whether all of them are jointly and severally liable to answer the claim of the plaintiffs Before considering these questions, let me refer to certain provisions of the Customs Act, which have relevance.
13. According to Section-7, the Central Board of Excise and Customs may appoint the ports and airports which atone shall be customs ports or customs airports for the unloading of imported goods and the loading of export goods or any class of such goods.
14. According to Section 8 of the Act, the Commissioner of customs may approve proper places in any customs port or customs airport for unloading and loading of goods or for any class of goods and also may specify the limits of customs area.
15. Section 29 of the Act directs the person-in-charge of an aircraft entering to the Indian territory from any place out side while carrying passengers or Cargo brought in that aircraft shall not permit or cause such aircraft to land at any place other than a customs airport. There is no dispute that the Bangalore Airport was duly notified as Customs Airport. Therefore, the Cargo brought from out side India could land in Bangalore Airport.
16. According to Section 30 the person-in-charge of the aircraft carrying imported goods or any person notified in that behalf by the Central Government should deliver to the proper officer an import manifest prior to the arrival of the aircraft in the prescribed form. The term 'Proper Officer' is defined under Section 2(34) to mean, 'An officer of Customs, who is assigned those functions by the Board or the Commissioner of Customs.
17. Section 32 of the Act directs that, 'no imported goods required to be mentioned under the regulations in an import manifest or import report shall, except with the permission of the proper officer, be unloaded at any customs station unless they are specified in such manifest or report for being unloaded at that customs station'.
18. Section 33 also directs that, 'no imported goods shall be unloaded, and no export goods shall be loaded, at any place other than a place approved under Clause (a) of Section-8 for unloading or loading of such goods'.
19. Thus from the aforesaid provisions, it is clear that the imported goods should land only in customs area of the notified customs Airport and such imported goods should he unloaded only in the customs area notified in the presence of the proper officer.
20. Section - 45 deals with clearance of imported goods and export goods. According to Sub-section (1) of Section 45, all imported goods unloaded in a customs area shall remain in the custody of such person as may be approved by the Commissioner of Customs until they are cleared for home consumption or are warehoused or are transhipped in accordance with the provisions of Chapter-VIII. Sub-section (2) of Section 45 deals with the duties of the person who would be given the custody of the imported goods unloaded in the customs area. According to Clause (a) of Sub-section (2) of Section 45, the person having custody of any imported goods in a customs area, shall keep a record of such goods and send a copy thereof to the proper officer and according to Clause (b) of Sub-section (2) of Section 45 of the Act, he shall not permit such goods to be removed from the customs area or otherwise dealt with, except under and in accordance with the permission in writing of the proper officer. (UNDERLINING IS MINE). Sub-section (3) of Section 45 deals with the contingency in the event of pilferage of such unloaded imported goods. According to this sub-section, if any imported goods are pilfered after unloading thereof in a customs area while in the custody of the person referred to in Sub-section (1), that person shall be liable to pay duty on such goods at the rate prevailing on the date of delivery of an import manifest or, as the case may be, an import report to the proper officer under Section 30.
21. Section 46 deals with the duty of the importer of the goods upon when entry of goods on importation. According to Sub-section (1) of Section 46, the importer of any goods, other than goods intended for transit or transhipment, shall make entry thereof by presenting to the proper officer a bill of entry for home consumption or warehousing in the prescribed form and such bill of entry shall include all the goods mentioned in the bill of lading or other receipt given by the carrier to the consignor.
22. Section 47 deals with the clearance of goods for home consumption. According to Sub-section (1), the proper officer on being satisfied that the goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, he may make an order permitting clearance of the goods for home consumption. According to Sub-section (2), if the importer fails to pay the import duty under Sub-section (1) within 5 days from the date on which the bill of entry is returned to him for payment of duty, he shall pay interest at the prescribed rate.
23. Section 48 lays down the procedure in case of goods not-cleared, warehoused or transhipped within 30 days after unloading. According to this section, if any goods brought into India from a place out side India are not cleared for home consumption or warehoused or transhipped within 30 days from the date of unloading thereof at a customs station or within such further time as the proper officer may allow or if the title to any imported goods is relinquished, such goods may, after notice to the importer and with the permission of the proper officer, be sold by the person having the custody thereof.
24. According to Section 49, in the ease of any imported goods, whether dutiable or not, entered for home consumption, if the Assistant Commissioner of Customs or Deputy Commissioner of Customs is satisfied on the application of the importer that the goods cannot be cleared within a reasonable time, the goods may, pending clearance, be permitted to be stored in a public warehouse, or in a private warehouse if facilities for deposit in a public warehouse are not available. However, goods so transferred to warehouse shall not be deemed to be warehoused goods for the purpose of this Act and the provisions of Chapter-IX will have no application to such goods.
25. Chapter-IX comprised of Section 57 to 73, deals with warehousing and we are not very much concerned with those provisions in these cases.
26. Thus, reading of the provisions contained in Chapter VII and VIII makes it clear that the moment & imported goods lands in the customs area of a customs airport, the Proper Officer in-charge of that customs airport, would take charge of the goods. However, till such goods are cleared either for home consumption or for warehousing, the arrangement for its storage is made under Section 45(1) by entrusting the custody of such imported goods till it is cleared, to a person who is known as custodian. While appointing the 1' defendant-MSIL as a custodian under Section 45(1) vide Public Notice No. 1/77 (Customs) dated 10.01.1977, further public notice No. 33/77 dated 29.12.1977 has been issued along with annexures giving the detailed procedures as to how the goods landing in customs area are to be handled by the customs authorities and by the custodian. The said notification along with its annexures have been marked during evidence in all the cases. The procedures laid down in the said annexures are in line with the provisions of the Act contained in Sections 30 to 33, 45 etc. referred to above. According to the contents of these annexures, imported goods kept in the custody of MSIL shall be stacked property to facilitate easy identification and location. Imported cargo shall be under double/shed lock and double security provided by MSIL and customs respectively and MSIL shall maintain proper accounts of the imported goods kept with them in the Air Cargo Complex in Proforma 'C' annexed. As per Clause (3) of this annexure attached to the public notice, the party, who is the importer should take the duplicate copy to the Warehouse Inspector for examination and clearance. The Examining Officer may examine the goods kept in the custody of MSIL and if he satisfied as to the quantity, quality, description etc, given in the Bills of Entry and other documents, he will give a stamp 'Passed out of customs Control' on the duplicate copy of the Bill of Entry.
27. According to Clause 3{c) of the said notice, the party then will take the Duplicate Bill of Entry to MSIL, who shall allow the party to take away the goods. Thus, the scheme of the Act as indicated in the aforesaid provisions and the notification, is that, a stop gap or a temporary arrangement is made for the proper storage of the imported goods after it landed in the customs area before it is cleared in all respects, either for home consumption or for warehousing. The custody of such imported goods with the custodian appointed under Section 45(1) is completely controlled by the Proper Officer of the Customs Authority. The Customs Authorities instead of themselves handling such imported goods landing in the customs area would entrust such storage to a person appointed as custodian. However, as indicated by statutory provisions as discussed above, the Customs Authorities would retain the complete control over the goods so stored with the custodian. The custodian is not an independent authority to deal with the imported goods and he has to act in accordance with the directions of the Proper Officer. Even the power of sale of the goods not cleared, warehoused or transhipped within the specified period, can be effected by the custodian only with the permission of the Proper Officer. Therefore, from the above, it is clear that the Customs Authorities exercise complete control over the imported goods though in possession of the custodian till it is cleared either for home consumption or for warehousing or transhipped. No doubt, the custodian is under an obligation to store such goods in a proper manner and take all possible precautions to prevent any kind of accident or destruction or pilferage.
28. No doubt according to the provisions of Section 45(3), in case of pilferage of the imported goods in possession of the custodian, the custodian is liable to pay duty of such goods to the Department. This does not indicate that the Customs Authorities have no control over the goods nor it would indicate that the customs authorities are not answerable for the loss of goods. This provision is to ensure payment of duty payable on the goods imported so that there will be no loss to exchequer.
29. Section 62 of the Act indicates that the Customs Authorities have complete control over the warehoused goods. No doubt, there is no provision similar to Section 62 in relation to the goods in possession of the custodian appointed under Section 45(1). However, reading of the entire provision contained in Chapter-VII makes it clear that the Customs Authorities exercise complete control over the imported goods while in possession of custodian.
30. In the light of the aforesaid provisions, in so far the importer is concerned, the moment imported goods lands in customs area, since statutorily it has to remain in the custody of the Customs Authorities till it is released either for home consumption or for warehousing, there will be a statutory creation of bailment and the Customs Authorities become the bailee vis-a-vis the importer. Therefore, in my considered opinion, the customs authorities are principally liable for the proper return of the imported goods to the importer concerned on its clearance. No doubt, the custodian is a statutory creation. However, it is an arrangement made by the customs department for proper storage of the imported goods till they are cleared. On that ground, the customs authorities cannot plead that they are not liable to answer the importer for any loss or damage to such imported goods, though in possession of the custodian.
31. Section 141 of the Customs Act though appears to be a general provision, still it indicates that the goods in a customs area is subject to control of the officers of the customs. This section would also support the contention of both the plaintiffs and Defendant No. 1 that the customs authorities would exercise the complete control over the imported goods even in the possession of the custodian appointed under Section 45(1).
32. The Hon'ble Apex Court in the case of Oswal Spinning and Weaving Mills Ltd. v. Collector of Customs and Anr. reported in 1988 (3) SCC 30 : 1988 SCC (Cri.) 310 while dealing with the question as to what direction should be issued in case the goods ordered to be returned are not traceable, after referring to Section 45 of the Act, has observed in Para-5 thus:
In view of these provisions in the Act, there can be a little scope to dispute that until the goods are cleared for home consumption, the scheme of the Act requires the goods to remain in the hands of the customs authorities and obviously the statutory liability to account for the goods would be of the authorities under the Act charged with responsibility of keeping the goods.
33. In the case reported in : AIR 1996 SC 2508 [Bharathi Knitting Co. v. DHL, Worldwide Express Courier Division of Airfreight Ltd.] relied on by Smt. Yovini Rajesh Rohra, though the principles of limited liability of the consignee is recognised, it was on account of the contract between the consignor and the consignee; it was a contractual obligation between the parties and there was a privity of contract between the parties and the parties had agreed to the terms restricting the liability of the consignor. However, in the case on hand, to the contract of limited liability on the part of the MSIL, neither the importer nor insurer of the importer is a party. It was an arrangement between the custodian and the Customs Department. Therefore, that clause regarding limited liability could be enforced only against the Customs Department and not against the importer or the insurer of the importer. Therefore, the said decision has no application to the facts of this case.
33. In the case of International Airports Authority of India and Ors. v. Grand Slam International and Ors. 1999 (3) SCC 151, after referring to Section 45 and also Section 2(11) of the Act, the Apex Court has observed as under:
It is thus clear that the imported goods are kept at the airport or the Warehousing Corporation in the customs area over which it is the Customs Department which exercises control. No goods can be removed from there either by the importer or even the custodian. The detention is to enable the Customs Department to proceed in accordance with law and determine if the valuation disclosed was correct or the goods had been properly imported etc. A person importing the goods is required to comply with rules and notification issued by the Government permitting, prohibiting or regulating import. Whether the importer is complying with the rules or not and acting in accordance with law is entrusted to the Customs Department. No goods can be cleared except with permission of the Customs Department. Therefore, it is by operation of the statutory provision that an area specified as customs area is under control of the Customs Department. In fact fictionally it is the Customs Department which for purposes of imported goods, its checking, storage, release etc, is in control of it.
34. In the light of the above, there is no difficulty in holding that having regard to the scheme of the Act and the manner in which the imported goods landing in Customs Area are handled the Customs Authorities are liable to account for the loss of such imported goods. The Court below in SC No. 1087 of 2003 has rightly held that the Customs Authorities are answerable to the claim of the plaintiff. However, the learned Judge, in other cases, has over-looked the purpose and the Scheme of the Act as contained in the aforesaid provisions and has gone to an extent of holding that the Customs Authorities do not exercise any control over the imported goods handed over to the possession of the custodian and therefore, they are not liable to account for the loss of goods. In my considered opinion, the said finding is erroneous having regard to the scheme of the Act Any arrangement made by the Customs Department for proper storage of such imported goods, by appointing the custodian, would not absolve its liability to account for the loss, if any, of such imported goods even if such goods were in possession of the custodian.
35. In the light of the statutory creation of the custodian under Section 45(1), even custodian is answerable to the Customs Department for any loss or destruction of such goods.
36. According to Section 151 of the Indian Contract Act, in all cases of Bailment, the Bailee is bound to take as much care of the goods bailed to him as a man of ordinary prudence would under similar circumstances take, of his own goods of the same bulk, quality and value of the goods bailed. Thus, the Bailee is under an obligation to take proper care in respect of the goods bailed with him. It is only if he establishes that he has taken all the care as is required by a man of ordinary prudence, he is absolved from liability.
37. As per Section-152 of the Indian Contract Act, the bailee in the absence of any special contract, is not responsible for the loss, destruction or deterioration of the thing bailed, if he has taken the amount of care of it described in Section 151.
38. In the case on hand, the Court below have recorded a finding of fact that Defendant No. 1 has not been able to satisfactorily prove that it had taken all care in respect of the imported goods, which was in its custody. The cause of fire is also not specifically indicated. Therefore, in the absence of any such evidence to indicate that Defendant No. 1 had taken all the care required as provided under Section 151 of the Indian Contract Act, it is not open for it to contend that it is not liable for losses occasioned. No doubt, as per the public notice, which was issued pursuant to an arrangement between the Customs Department and the Custodian, the liability of the custodian is limited to 20 US $ per Kg., or the actual value of the imported goods, whichever is less. Even if the said public notice has been Gezetted, it does not absolve the 1st defendant from its liability to answer the claim of the plaintiffs with regard to the loss of goods. The terms of the said public notice would only bind the MSIL and the Customs Authorities. It is open to the 1st defendant to workout its remedies with the Customs Authorities in accordance with law and in accordance with the terms agreed to between them to restrict its liability. In my considered opinion, the terms of said public notice would not bind the importer. Therefore, in my considered opinion, the Court below, namely, the HI Additional Judge of the Court of Small Causes, is not justified in decreeing the suits only against Defendant No. 1. The Court below ought to have decreed the suits against all the three defendants directing them to pay the decreetal amount jointly and severally. The reliance placed on the judgment of Madras High Court has no application to the facts of this case for the reason that the said case was decided on the basis of the provisions contained in the Madras Port Trust Act, which is a self-contained Code by itself
39. In view of the above discussion, I hold that there is no error committed by the learned II Additional Judge of the Court of Small Causes in decreeing the suit in O.S. No. 1087 of 2003 against all the three defendants holding them jointly and severally liable to answer the claim of the plaintiffs. Therefore, I find no grounds to interfere with the same, as such, CRP No. 126 of 2005 and CRR No. 294 of 2005 have no merit and they are liable to be dismissed. The Judgment and Decrees passed by the III Additional Judge of the Court of Small Causes dismissing the suits against Defendants 2 and 3 is liable to be set aside and the said decrees are required to be modified directing all the three defendants to pay the decreetal amount jointly and severally together with interest as fixed by the Court below. In this view of the matter, the CRPs. filed by the Insurer and the importer deserve to be allowed while the CRPs. filed by MSIL are liable to be dismissed.
40. Accordingly, CRPs. 126 of 2005 and C.R.P. 294 of 2005 are dismissed. The judgment and decree passed in SC No. 1087 of 2003 by the I Additional Judge of the Court of Small Causes, Bangalore is affirmed, C.R.Ps. 586 of 2007 to 609 of 2007 are allowed. The judgment and decree passed in S.C. No. 2326-2327/2003, 1080-1086/2003, 1088-1089/2003, 226/04, 280/04, 359-365/2004, 417/2004, 459/2004 and 460/2004 dismissing the suits against Defendants - 2 and 3 are hereby set aside. In modification of the judgment and decree passed by the trial Court, these suits are decreed against all the three defendants and they are directed to pay the decreetal amount jointly and severally together with interest at 6% from the date of the suit till the date of payment CRPs. 614/2007 to 621/2007 and 623/2007 to 637/2007 and are dismissed. Under the circumstances, I direct the parties to bear their own costs.