Karnataka High Court
Shell Apparels Private Limited vs Dynamic Freight Forwarders on 9 September, 2022
Author: P.S. Dinesh Kumar
Bench: P.S. Dinesh Kumar
R.F.A No.929/2010
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 9TH DAY OF SEPTEMBER, 2022
PRESENT
THE HON'BLE MR. JUSTICE P.S. DINESH KUMAR
AND
THE HON'BLE MRS. JUSTICE M.G. UMA
REGULAR FIRST APPEAL No.929 OF 2010 (MON)
BETWEEN :
SHELL APPARELS PRIVATE LIMITED
A COMPANY INCORPORATED UNDER
THE PROVISIONS OF THE COMPANIES
ACT, 1956 HAVING ITS REGISTERED
OFFICE AT NO.103, 3RD MAIN
INDUSTRIAL TOWN, RAJAJINAGAR
BANGALORE - 560 044
AND FACTORY AT NO.10/15
MAGADI MAIN ROAD, SUNKADAKATTE
BANGALORE - 560 091
REPRESENTED HEREIN BY ITS
DIRECTOR V. RAVI ... APPELLANT
(BY SHRI. S.S. NAGANAND, SENIOR ADVOCATE FOR
SHRI. PRADYUMNA K.V., ADVOCATE)
[THROUGH VIDEO CONFERENCING]
AND :
1. DYNAMIC FREIGHT FORWARDERS
PRIVATE LIMITED, A COMPANY
INCORPORATED UNDER THE PROVISIONS
OF THE COMPANIES ACT, 1956 HAVING ITS
REGISTERED OFFICE AT M-1, SALSBURG
R.F.A No.929/2010
2
SQUARE, 107, HARRINGTON ROAD
CHETPET, CHENNAI - 600 031 AND A
LOCAL OFFICE AT 22/85, KRISHNA REDDY
COLONY, DOMLUR LAYOUT
BANGALORE - 560 071
REPRESENTED HEREIN BY ITS
DIRECTOR.
2. CMA-CGM (E&S) INDIA PRIVATE LIMITED
A COMPANY INCORPORATED UNDER THE
PROVISIONS OF THE COMPANIES ACT, 1956
HAVING ITS REGISTERED OFFICE AT NO.118
DR. RADHAKRISHNA SALAI, MYLAPORE
CHENNAI - 600 004
REPRESENTED HEREIN BY ITS
DIRECTOR ... RESPONDENTS
(BY SHRI. S.V. GIRIDHAR, ADVOCATE FOR R1;
R2 SERVED)
THIS RFA IS FILED U/S 96 OF CPC., AGAINST THE
JUDGMENT AND DECREE DATED:28.01.2010 PASSED IN
OS.NO.7830/2005 ON THE FILE OF THE XIX ADDL. CITY
CIVIL & SESSIONS JUDGE, BANGALORE, DISMISSING THE
SUIT FOR RECOVERY OF MONEY.
THIS RFA, HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 10.08.2022 COMING ON FOR
PRONOUNCEMENT OF JUDGMENT, THIS DAY, P.S.DINESH
KUMAR J, PRONOUNCED THE FOLLOWING:-
JUDGMENT
This appeal by the plaintiff is directed against judgment and decree dated January 28, 2010 in O.S. No.7830/2005 on the file of XIX Additional City Civil and Sessions Judge, Bengaluru. R.F.A No.929/2010 3
2. For the sake of convenience, parties shall be referred to as per their status before the Trial Court.
3. Brief facts of the case are, plaintiff brought the instant suit contending inter alia that plaintiff is a Private Limited Company in the business of manufacture and export of Readymade Garments; that, in 2004, it exported garments to Italy; that, it entrusted the goods to the first defendant, the Clearing and Forwarding Agent and the goods were shipped through a Vessel 'Feeder-4' through the second defendant engaged in the business of shipping; that the goods were delivered belatedly and the consignee has claimed a damage of USD 35,113 with interest at 18% p.a. thereon, from the plaintiff. With these averments, plaintiff sought for a decree against defendants for a sum of USD 43,013.42. Defendants contested the suit by filing written statements and parties went to trial. R.F.A No.929/2010 4 After trial, the suit has been dismissed. Hence, this appeal.
4. Sri. S.S. Naganand, learned Senior Advocate for the plaintiff mainly contended that:
• goods were booked on August 15, 2004 to be delivered on or before September 16, 2004, but they have been delivered on October 18, 2004. The consignee had withheld 50% of the value of consignment quantified as USD 58,174.60 as penalty for delay in delivery; • plaintiff claimed the said amount from the defendants by issuing a legal notice as per Ex.P35;
• after negotiation with the consignee, as per Ex.P42, it was agreed that plaintiff shall bear loss of USD 35,113.60. Accordingly, plaintiff has brought the instant suit against the defendant;R.F.A No.929/2010
5 • the learned Trial Court has erred in disbelieving Exs.P41 and P42 on the ground that the said documents were not produced at the time of filing the suit, but produced subsequently. Ex.P41 is the Certified extract of the Board Resolution passed in the meeting held on October 8, 2007, authorizing plaintiff's Managing Director to institute the suit against defendants. Ex.P42 is letter dated August 10, 2005 by the consignee to the plaintiff confirming receipt of damages of USD 35,113.60. The Trial Court has accepted the reasons assigned by the plaintiff while allowing the application for production of documents. Though the defendants raised objections for marking the said documents, they could not substantiate their objections. The Trial Court has not recorded any specific reason urged by the defendants for objecting R.F.A No.929/2010 6 marking of documents. Therefore, the Trial Court had no reason to disbelieve the said documents;
• defendants have not let in any evidence to prove that Ex.P42 is fabricated. Therefore, Trial Court erred in disbelieving the contents of Ex.P42;
• the Trial Court has held that there is privity of Contract between plaintiff and the second defendant, but yet answered the issue No.4 in the negative. Hence, the impugned judgment is not sustainable in law;
• similarly, while answering issue No.3, the Trial Court has held that the suit is bad for non-joinder of necessary parties contrary to its finding with regard to issue No.4 that there is privity of Contract between plaintiff and second defendant, particularly, when the second defendant has not disclosed that it was R.F.A No.929/2010 7 acting as agent of CMA-CGM SA. Therefore, the Contract between plaintiff and second defendant is presumed to exist under Section 230 of the Indian Contract act.
5. With the above submissions, Shri. Naganand prayed that this appeal be allowed.
6. Opposing the appeal, Shri. Giridhar, learned Advocate for first defendant submitted that:
• first defendant is only a Clearing and Forwarding Agent. As per Ex.P6, it has only quoted best sea export rates. The alternative shipping options have been given by the second defendant to the plaintiff as per Ex.P7 and the plaintiff has made its conscious choice of option;
• the responsibility of first defendant comes to end once the goods are loaded on to the Ship; R.F.A No.929/2010 8 • first defendant has no control over the sailing of the Ship and it has not given any assurance to the plaintiff with regard to the date of delivery.
7. In substance, Shri. Giridhar argued that first defendant being the Clearing and Forwarding Agent, is not responsible for the delayed delivery.
8. We have carefully considered rival contentions and perused the records.
9. Plaintiff's case is that it has suffered loss because the consignee has imposed penalty for delayed delivery of goods and thus, sought to recover the same from the defendants. On completion of pleadings, Trial Court has framed following issues:
1. Whether the plaintiff proves that due to negligent act of defendants 1 and 2, the Plaintiff sustained loss to the tune of USD 35,113.00? R.F.A No.929/2010 9
2. Whether the plaintiff further proves that the plaintiff is entitled for interest at the rate of 18% pa.
from 15.8.2004 till filing of suit?
3. Whether the defendants prove that the suit is bad for non-joinder of necessary parties?
4. Whether the 2nd defendant proves that there is no privity of contract between plaintiff and 2nd defendant?
5. Whether the 2nd defendant proves that the suit is time barred as pleaded in para 12 of the written statement?
6. Whether the plaintiff is entitled for the decree sought?
7. What Order or decree?
10. On behalf of plaintiff, one witness has been examined as P.W.1 and Exs.P1 to P42 marked. On behalf of defendants, two witnesses, D.W.1 and D.W.2 have been examined and Exs. D1 to D3 marked. The Trial Court has answered issues No. 1, 2, 4, 5 and 6 in the negative and issue No.3 in the affirmative and dismissed the suit. R.F.A No.929/2010 10
11. In the light of the pleadings and evidence on record and the contentions advanced on behalf of the plaintiff and first defendant, following points arise for our consideration:
1. Whether plaintiff has proved that it has suffered loss of USD 35,113 due to delayed delivery of goods?
2. Whether defendants have assured/promised to deliver the goods on 16.09.2004 to the Consignee at Civitavacchia?
3. Whether the impugned judgment requires interference?
Re: points No.1 & 2
12. The correspondence between plaintiff and first defendant has commenced with Ex.P6 dated August 10, 2004. By the communication, first defendant has conveyed the carriage charges between Tuticorin and Civitavecchia. On August 11, 2004, second defendant has given two alternative options to the plaintiff for transhipment of the R.F.A No.929/2010 11 goods as per Ex.P7. In the first option, the expected date of arrival of the Vessel in Civitavecchia is mentioned as September 16, 2004 and in the second option as September 23, 2004. Bill of Lading as per Ex.P13 has been issued by the second defendant on August 15, 2004. As per Ex.P16, plaintiff has informed first defendant by email that the consignee would penalize Euro 6000 towards late shipment penalty. There are other email correspondence between plaintiff and the first defendant. Shri. Naganand, placing reliance on Exs.P19 and P20, submitted that first defendant had informed that it would take up the issue with the second defendant and therefore, the first defendant was also liable to pay the amount claimed in the plaint.
13. The first respondent has categorically replied as per Ex.P28 stating inter alia that the carrier was chosen by the plaintiff after having R.F.A No.929/2010 12 direct communication and that the delay in transit was communicated by the Carrier directly to the plaintiff.
14. The second defendant has also categorically stated in Ex.P31 that the estimated time of arrival of the cargo is, 'just an estimate as per Hague Visby Rules' and the Carrier is not responsible for strikes or lockouts or stoppage etc. Further, as per Clause 8.4 of Bill of Lading, the Carrier does not undertake that goods shall arrive at the Port of discharge or place of delivery at any particular time and Carrier shall in such circumstance be liable for direct, indirect or consequential loss or damage caused by the delay.
15. In his examination-in-chief (para 4), P.W.1 has stated that during finalization of the shipping details, second defendant had given two options and the plaintiff had chosen the option R.F.A No.929/2010 13 which provided for loading at Tuticorin Port on August 15, 2004 and arrival in Civitavecchia on September 16, 2004.
16. In his cross-examination (para 2), P.W.1 has admitted that he was aware of the roles played by the respective defendants; that Freight forwarder books the Cargo to its destination and first defendant is not the actual Carrier. He has further admitted that ETA is expected time of arrival and he had not given any written instructions to the defendant that the Vessel should reach at a particular time.
17. Thus, plaintiff has admitted that it had accepted the one of options given by the second defendant and it had not given any specific instruction in writing with regard to the date of delivery. P.W.1 has also admitted in the R.F.A No.929/2010 14 cross-examination that it has not placed any Contract before the Court.
18. Plaintiff has quantified the damages based on Ex.P42. It is a letter from the consignee Gabruns S.p.A, Roma-Italia. The relevant portion of that letter reads as follows:
"Thereafter we have had several talks and discussions so that we can settle the matter amicably and our mutual business may continue profitably in future. We are grateful that Shell has been quite reasonable and co-operative during our discussions and we very much appreciate the same. However, we would not be able to write off the entire loss caused to us. We understand that the delay was not caused on account of any negligence or inaction by Shell, but the delay was caused due to late shipment which could be attributed to the liner and the booking agent.
Therefore keeping in mind our future business relationship we are agreeable to write off a portion of the aforesaid sum of USD 58,174.60 to the extent of USD 23,061.00. We had at the time of concluding settlement talks, agreed that Shell would bear the loss of USD 35,113.60 by way of bearing freight charges for future shipments/consignments and by R.F.A No.929/2010 15 giving us free samples of material. We confirm that a sum of USD 35,113.60 has been received by us towards loss compensation by Shell in the manner stated above."
19. Admittedly, suit was filed on October 15, 2005. P.W.1 has admitted in the cross-examination that Ex.P42 was in his custody at the time of filing the suit and he did not know whether it was referred in the plaint or not. He has also admitted that he did not know who had signed Ex.P42. He has admitted that Balance Sheet and Books of Accounts were not produced. He has denied a suggestion that there was no loss and therefore, he had withheld the account books and the Balance Sheet. But no account book/certified extract is on record. P.W.1 has also admitted that there was no written agreement between the plaintiff and its Consignee binding the plaintiff to pay damages, in case the goods were not delivered in time. It is relevant to note that a specific suggestion was R.F.A No.929/2010 16 made to the PW.1 that he was not in possession of Ex.P42 at the time of filing the suit. But the fact remains that the said document was not filed along with the plaint.
20. Adverting to Ex.P42, it was argued by Shri. Giridhar that the said document was a created one. He pointed out that as per the said letter, it was agreed between the parties that plaintiff would bear the loss of USD 35,113.60 in the form of Freight charges for future shipments and by giving free samples of material.
21. There is considerable force in Shri. Giridhar's argument that Ex.P42 was created subsequently. We say so because, firstly, P.W.1 has stated in evidence that the said letter was in his possession at the time of filing the suit, but, the same has not been filed along with the plaint. Secondly, as per Ex.P42, parties had agreed that R.F.A No.929/2010 17 plaintiff would bear the loss of USD 35,113.60 by way of Freight charges for future shipments and by giving free samples of material. There is nothing on record to show that plaintiff had defrayed any Freight charges after August 2005 or supplied any free samples. Plaintiff's entire claim hinges upon Ex.P42 and the said document, though according to the plaintiff was available, has not been filed along with the plaint. Therefore in our view, the plaintiff has failed to prove that it had suffered loss due to delayed delivery of goods. It has also failed to prove that defendants had assured delivery of goods on a particular date. Hence, both points No. 1 and 2 are answered in the negative. Re point No.3
22. In view of our finding on points No.1 and 2, this point is also answered in the negative. R.F.A No.929/2010 18
23. Resultantly, this appeal must fail and it is accordingly dismissed.
No costs.
Sd/-
JUDGE Sd/-
JUDGE SPS