These joined second appeals arose out of claims brought by the three respondents and their insurers against the appellant carrier for damage to electrolytic tin plates which arrived at the Port of Chennai on 9 June 1995 on board the KBANJ 0669. Claim letters were issued on 26 October 1995. The respondents' insurers paid out and were subrogated to the respondents' claims. The insurers then filed consumer complaints with the District Consumer Disputes Redressal Forum, Chennai, which ruled in their favour. The appellant carrier appealed, and the State Consumer Disputes Redressal Commission, Chennai, allowed the appeals on 17 May 2000, holding that a subrogated insurance company was not a consumer, and therefore could not maintain a consumer complaint under the Consumer Protection Act 1986 (the CPA). However, the State Consumer Disputes Redressal Commission granted liberty to the respondents to pursue their civil remedies against the appellant carrier.

Thereafter, the respondents and their insurers filed civil suits before the City Civil Court at Chennai. They pleaded that they were entitled to claim the benefit of s 14 of the Limitation Act 1963 (the Limitation Act), which provides that limitation is excluded during the period in which 'the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant ... , where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it'. The respondents submitted that the actions before the consumer forum were brought in good faith, and were filed before the Supreme Court decided in Oberai Forwarding Agency v New India Assurance Co Ltd [2000] INSC 32, 2000 (1) CTC 556 that a subrogated insurance company is not a consumer under the CPA.

The appellant carrier pleaded, among other things, that the respondents' suits were barred by limitation under art 3.6 of the Carriage of Goods by Sea Act 1925 (COGSA). Under art 3.6 of COGSA, any claim against the carrier for damage of cargo has to be instituted within one year from the date of noticing the damage.

The trial Court held in favour of the respondents on 26 September 2005. The appellant appealed to the Additional District Judge, Chennai. The lower appellate Court confirmed the findings of the trial Court and dismissed the appellant's appeals. The appellant carrier brought second appeals to this Court.

The appellant referred to art 3.6 of COGSA as applying to the consignments imported by the respondents. The appellant subsequently submitted that reference was made to COGSA only for the purpose of highlighting the fact that COGSA is also based on the Hague Rules, as is seen from the Preamble of COGSA and the terms and conditions of the bills of lading issued. Indian Courts have consistently held that art 3.6 of the Hague Rules, which relates to the 'extinguishment of liability' of the carrier, takes effect one year from the date of discharge of the goods at the discharge port. The bills of lading evidencing the contracts of carriage in respect of all three consignments stated that the Hague Rules were the applicable legislation for the consignments. Clause 6(4)(G) of the bill of lading entitled 'Time Bar' made it clear that the carrier would be discharged of all liabilities unless suit was brought in the proper forum and written notice was received by the carrier within nine months after delivery of the goods or the date when the goods should have been delivered.

The appellant argued that the Hague Rules, being a special law, overrode the Limitation Act. The CPA complaints filed by the respondents could not be considered as a 'civil proceeding' in terms of the provisions of the Code of Civil Procedure for the purpose of invoking s 14 of the Limitation Act. The District Consumer Disputes Redressal Forum also could not be regarded as a 'court', as envisaged under s 14 of the Limitation Act.

The respondents argued that the appellant's second appeals were not maintainable, as the latter had not chosen to dispute factual liability for the alleged losses caused to the goods. COGSA was not applicable to the facts of this case. Section 2 of COGSA makes the Act applicable only in connection with the carriage of goods by sea in ships from any port in India to any other port, whether in or outside India. Since the relevant consignments were delivered from ports outside India, COGSA was not applicable here. The plea of generalia specialibus non derogat could not be invoked by the appellant. Since COGSA was not applicable, s 14 of the Limitation Act was attracted.

At the time of filing of the respondents' complaints before the District Consumer Disputes Redressal Forum, they were validly instituted and very much maintainable in law. They were filed within one year from the date of the cause of action.

Article 3.6 of COGSA does not stipulate that a 'suit' should be a civil suit in a civil court. If the clause is read literally, it does not exclude even the presentation of a suit in an incorrect forum and approaching the correct forum later, in which case, s 14 of the Limitation Act can be invoked.

Held: Appeals dismissed.

The consumer complaints filed by the respondents before the District Consumer Disputes Redressal Forum were validly filed at the date of filing, and were maintainable against the appellant carrier. The respondents succeeded before the District Consumer Disputes Redressal Forum. The findings of the District Consumer Disputes Redressal Forum on jurisdiction were only reversed on appeal following the subsequent Supreme Court decision in Oberai Forwarding Agency. The State Consumer Disputes Redressal Commission nonetheless granted liberty to the respondents to pursue a civil remedy in respect of their claims. The State Consumer Disputes Redressal Commission made its order on 17 May 2000, and the respondents immediately filed civil suits on 16 June 2000. Since the consumer complaints were validly filed, and the civil suits were also filed immediately, it cannot be said that the respondents have not been diligent in initiating legal proceedings for recovery of money on account of damage to the cargo.

At the time when the cause of action arose for the respondents to seek damages, there were two legal options available to them, namely to approach the consumer forum, or to approach the civil court. Having validly exercised the doctrine of election by filing consumer complaints instead of civil suits, when both were legally maintainable, the respondents have exercised due diligence and good faith, and filed valid consumer complaints before the District Consumer Disputes Redressal Forum.

The appellant submits that the proceedings initiated by the respondents before the consumer forum are not 'civil proceedings' and are also not a 'suit', and hence, s 14 of the Limitation Act is not attracted. This argument does not hold water for the following reasons:

1. COGSA does not exclude the applicability of s 14 of the Limitation Act.
2. It is a recognised rule of interpretation of statutes that their words should ordinarily be understood in a sense which best harmonises with the object of the statute, and which effects the object of the legislature.
3. The respondents, having validly instituted consumer complaints, should not be left in the lurch in view of the subsequent Supreme Court decision in Oberai Forwarding Agency.
4. The Court should adopt an object-oriented approach, keeping in mind the principle that legislative futility is to be ruled out so long as interpretative possibility permits.
5. Section 14 of the Limitation Act cannot be interpreted with rigid and pedantic adherence to its literal meaning, to hold that only civil proceedings in court would enjoy exclusion. If such a narrow interpretation were adopted, an applicant would not even be entitled to exclusion of the period of time spent in a bona fide manner invoking and diligently pursuing an earlier proceeding before another appropriate legal forum.
6. The Supreme Court in Commissioner of Income-Tax, Bombay v Ishwarlal Bhagwandas [1965] INSC 137, 1965 AIR 1818, 1966 SCR (1) 190 held as follows: 'The expression "civil proceedings" is not defined in the Constitution, nor in the General Clauses Act. The expression in our judgment covers all proceedings in which a party asserts the existence of a civil right conferred by the civil law or by statute, and claims relief for breach thereof.'

Hence, it cannot be said that the consumer complaints filed by the respondents are not civil proceedings for the purpose of s 14 of the Limitation Act.

It is clear that s 14 of the Limitation Act is also applicable to special enactments, including COGSA, unless and until any of the special enactments excludes the applicability of s 14. As COGSA does not exclude the applicability of s 14, s 14 applies to COGSA which is in pari materia with the Hague or Hague-Visby Rules.

In this case, the damaged cargo arrived at the Port of Chennai from a port outside India, and therefore COGSA is not applicable to the consignments in question. In the course of arguments, counsel for the appellant took a different stand, and submitted that reference to COGSA was made only for the purpose of highlighting the fact that COGSA was based on the Hague Rules. No specific plea was made by the appellant that the Hague or Hague-Visby Rules, as the case may be, were applicable to the consignments. The appellant has only specifically pleaded that COGSA is applicable to the consignments. When there is no pleading that the Hague or Hague-Visby Rules are applicable, and there is no oral evidence in support of that contention, and the contention is raised by counsel for the appellant during the course of his arguments, it is only an afterthought and cannot be accepted by this Court.

In summary:

1. The respondents' suits have been validly instituted, and the Courts below have rightly applied s 14 of the Limitation Act, and have rightly excluded the period during which proceedings were pending before the consumer forum for the same relief for the purpose of saving limitation;
2. The Courts below were correct in invoking s 14 of the Limitation Act, while interpreting the statutory law governing contracts of carriage of goods by sea;
3. The Courts below have concurrently held that the suits are maintainable by applying s 14 of the Limitation Act, which is a correct finding, as the respondents have initiated consumer complaints with good faith and in accordance with law. The Courts below rightly applied s 14, which saves limitation for the suits which are the subject matter of these second appeals.