Madras High Court
M/S. Sri Saravana Shipping Services (P) ... vs M/S.Trans Asian Shipping (P) Ltd on 3 June, 2025
Author: Sathi Kumar Sukumara Kurup
Bench: Sathi Kumar Sukumara Kurup
A.S.No.531 of 2013
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 03.06.2025
CORAM :
THE HON'BLE MR. JUSTICE SATHI KUMAR SUKUMARA KURUP
A.S.No.531 of 2013
M/s. Sri Saravana Shipping Services (P) Ltd
Represented by its Managing Director
Mr.T.Loganathan,
No.15, IV North Beach Road,
Krishnan Koil Street,
Chennai 600 001. .. Appellant
Versus
M/s.Trans Asian Shipping (P) Ltd
Malavika Center,
5th floor, No.144/145,
Kodambakkam High Road,
Chennai – 600 034
(vide Court Order dated 06.12.2022 made in
CMP 27296/2019 in AS No.531/2013 (VBSJ) .. Respondent
First Appeal filed under Order XLI Rule 122 r/w.96 of C.P.C against the
judgment and decree dated 11.10.2012 made in O.S.No.14299/2010 passed by
the learned III Additional City Civil Court, Chennai.
For Appellant : Mr.G.Ilangovan
For Respondent : M/s.Anitha Thomas for R1.
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A.S.No.531 of 2013
JUDGMENT
Appeal Suit had been filed against the judgment and decree dated 11.10.2012 made in O.S.No.14299/2010 passed by the learned III Additional City Civil Court, Chennai.
2. The learned Counsel for the Appellant, thiru. G.Ilangovan submitted his arguments on behalf of the Appellant. The learned Counsel for the Appellant submitted that the Appellant is M/s. Sri Saravana Shipping Services Private Limited. The Appellant is the Plaintiff. The suit was originally filed as a Civil Suit No.503 of 1999 on the file of the Original Side of the High Court. Pending suit, the pecuniary jurisdiction of the District Courts were enhanced. Therefore, the Civil Suit No.503 of 1999 was transferred to the file of the City Civil Court. On transfer, the suit was renumbered as O.S.No.14299 of 2010. The Plaintiff in C.S.No.503 of 1999, renumbered as O.S.No.14299 of 2010 on the file of the City Civil Court had filed the suit for claim of Rs.12,78,516/- from the Defendant-1 and Defendant-2 and also for interest at the rate of 24% per annum for Rs.7,84,366/- from the date of plaint till the date of realisation. The Plaintiffs were the authorized Customs Clearing and forwarding Agents. They had been acting as a clearing and forwarding Agents of the consignments of their customers from Chennai Port.
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3. The consignments are being carried through the containers which belong to the Principal/Steamer Agents. The deposit amount will be returned after the container is handed over to the Principal/steamer Agents. The Defendant-1 and Defendant-2 have rendered such container services to the Plaintiff herein. The Plaintiff submitted that in respect of the container services rendered by the Defendants, the Plaintiff have deposited huge advance amount with the Defendant-1 who is the Inland Agent of Defendant-2, the Principal for all containers which were moved during the period from 20.04.1995 to 13.11.1997. As such the Plaintiff had paid more than a sum of Rs.7,78,782/- to the Defendant-1 on several dates and the Defendant-1 used to adjust the balance amount of one debit note against another and raised subsequent debit note in respect of the containers moved and returned, right from the beginning, under a running account. After the delivery of containers, the Defendant-1 used to raise debit notes on the Plaintiff. When the Defendant-1 was claiming amount towards container repairing charges, they have furnished only the estimation bills given by their container repairing Agents. The Defendant-1 had raised debit notes on the Plaintiff for the containers moved from 20.04.1995 to 13.11.1997. The Defendant-1 had not conducted any pre-survey, post-survey or joint-survey for assessing the actual damages if any caused to 3/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 the containers.
4. The Plaintiff stated that the usual practices in assessing the damages of the containers is that before taking the delivery of the container, a pre- survey should be conducted in the presence of the Plaintiff. After the container is handed over to the Defendants by the Plaintiffs, a survey should be conducted by an authorized Surveyor in the presence of the Plaintiff which is called post-survey or joint-survey. Without conducting any survey in assessing the damages to the containers, the Defendant-1 had claimed some imaginary amount by producing estimation bills given by their container repairing Agents which is highly improper and against the general practice.
5. The Defendant-1 had furnished the estimation bills given by their container repairing Agent as if the same were a survey report. Hence the estimation bills are not reliable proof for the actual damages if any caused while transit and destuffing of the containers. In spite of repeated requests and reminders made by the Plaintiff, the Defendant-1 had not taken any initiatives for the conduct of due survey namely pre-survey, post-survey or joint-survey for the assessment of actual damages to the containers. The Plaintiff stated that there were no damages caused to any of the containers and the Defendant-1 had wrongly claimed some fictitious amount and had adjusted against the 4/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 deposits available with the Defendant-1 which is against law and practice.
6. The Plaintiff stated that after several request and reminders made, the Defendants had not returned the deposit amount. The Plaintiff has sent a legal notice dated 04.05.1998 to the Defendants calling upon the Defendants to pay their amounts. But the Defendants have sent a reply notice dated 22.06.1998 with all baseless and vexatious allegations. The Plaintiff had also issued another legal notice dated to the Defendant-1 and Defendant-2, but no reply was sent by the Defendants.
7. The Plaintiff stated that they had sent several reminders to the Defendant-1 to get back the deposit amount. The Defendant-1 was reluctant in returning the deposit amount and the Defendant-1 has returned only the excess storage charges to the Plaintiff by 2 cheques dated 20.12.1995 for for Rs.1,34,804.33/- and another cheque dated 05.03.1996 for Rs.97,270.30/- from and out of the running account maintained by the Defendant-1.
8. On careful verification of the accounts, there is a sum of Rs.5,664/- due and payable by the Defendants in respect of revised storage charges. The Defendant-1 has lastly sent a cheque dated 05.03.1996 for Rs.97,270.33/-. 5/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 After that the Defendant-1 had not paid any amount to the Plaintiff in spite of repeated demands made by the Plaintiff in respect of the amounts payable to the Plaintiff. Hence, as per running account maintained by the Defendant-1, there is a sum of Rs.7,84,366/-. The Defendants are also liable to pay interest at the rate of 24% per annum on the amounts due to the Plaintiff since the transaction being a commercial one. The interest on the said amount of Rs.7,84,366/- from 05.03.1996 to the date of filing of the suit at the rate of 24% per annum works out to a sum of Rs.4,94,150/-. Hence, the suit.
9. The learned Counsel for the Appellant also invited the attention of this Court that the plaint contained both the office copy and original copy of several letters claiming the amounts. Also, the learned Counsel for the Appellant invited attention of this Court to the contents of the written statement filed by the Defendant-1.
10. As per the written statement, the Plaintiff has no locus standi to file the above suit. The Plaintiff is only a clearing and forwarding Agent. A clearing and forwarding Agent (is only an Agent of its Principal) and all acts done by it are done on behalf of the Principal as authorized by them and has no independent existence apart from its Principal. In the present case, the Plaintiff had approached the Defendants only in its capacity as a clearing and 6/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 forwarding Agent of its Principals / Importers.
11. The real facts of the case is that when the Defendant's Principal Import containers stuffed with cargo of consignees/Importers arrive at the Port, the said consignees appoint clearing and forwarding Agents to do the paperwork with the Customs, Port and shipping line / steamer Agents for clearing their cargo and such clearing Agents do the paperwork for clearing the cargo and the Plaintiff herein is one such clearing and forwarding Agent. But all the charges in relation to the clearing work of the consignees cargo and other incidental charges are borne by such consignees/importers and not by the clearing and forwarding Agents. The clearing and forwarding Agents collect fees, service charges for their clearing and forwarding work from the consignees/ Importers. In fact, the contract of affreightment in shipping is between the shipping line and the consignees and not with the Plaintiff or this Defendant.
12. The contract of affreightment vide the bills of lading issued by this Defendant's Principal shipping line on which the Plaintiff is relying is between Principal shipping line and various importers and consignees named in the bills of Lading. A clearing and forwarding Agent like the Plaintiff has no role in such contract. There is no privity of contract between the Defendant and the 7/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 Plaintiff and also between this Defendant's Principal and the Plaintiff. Hence, the Plaintiff has no right to file the above suit without any authorization or subrogation from the consignees. All the charges/fees in relation to the cargo are paid by the consignees to the shipping line and a clearing and forwarding Agent like the Plaintiff and even a steamer Agent like the Defendant-1 is only an intermediary in such transaction. A clearing and forwarding Agent is only a facilitating Agent for enabling the consignees to make such payment / charges to the shipping lines. All charges relating to the consignments / cargo are paid by the consignees to the shipping line and the same may be direct or through clearing and forwarding Agents.
13. In the present case the Plaintiff had not made any payments independently i.e on its own account, the payments which were made by the Plaintiff in the above case was on behalf of its Principals /consignees. Just because a clearing and forwarding Agent makes such payment to the shipping line on behalf of its Principal / consignees, it will not confer any right on a clearing and forwarding Agent to seek for accounts. Such right to seek for accounts for payments can be made by the clearing and forwarding Agents only on behalf of its Principals / consignees. In the present case also, the Plaintiff who is only a clearing and forwarding Agent is seeking for accounts 8/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 in relation to payments made for clearing of consignments / cargo of its Principals / consignees. Hence, the plaintiff has no legal right to seek for any account or seek return of any amount; that right is vested with its Principals / consignees. The Plaintiff has no right to step into the shoes of its principals/ consignees. Hence, the suit is not maintainable on that account. Moreover, without making its Principals/consignees' parties to the above suit, the above suit is bad for non joinder of necessary parties.
14. After conclusion of the recording of evidence and after hearing the arguments of both parties, the learned III Additional Judge, City Civil Court had framed the following issues.
(i) Whether the Plaintiff has locus standi to file the above suit?
(ii) Whether there is any privity of contract between the Plaintiff and the first Defendant?
(iii) Whether the Plaintiff has got legal rights to seek for any account or seek return of any amount from the defendant?
(iv) Whether the suit is bad in law for non joinder of necessary parties namely the Principals/consignees?
(v) Whether the Defendant-1 is an unnecessary party to the suit?
(vi) Is the Plaintiff entitled to the suit claim or any part thereof?
(vii) Whether the Plaintiff is entitled to claim interest at the 9/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 rate of 24% per annum?
15. The Managing Director of the Plaintiff Company, Thiru. P.Loganathan examined himself as P.W-1 and during evidence, he had marked documents as Ex.A-1 to Ex.A-27. On the side of the Defendants, one Ashly Antony was examined as D.W-1 and no document was marked. After conclusion of the recording of evidence and after hearing the arguments of both parties, the learned III Additional Judge, City Civil Court on appreciation of evidence had answered the Issues-1 and 4 against the Plaintiff stating that the Plaintiff has no locus standi to file the above suit and that the suit is bad in law for non-joinder of necessary parties namely the Principals/Consignees. Issue-2 was answered stating that there is no privity of contract between the Plaintiff and the Defendants. Issue-3 was answered stating that the Plaintiff has no legal rights to seek any account or return of any amount from the Defendant. Issue-5 was answered in favour of the Plaintiff that the Defendant- 1 is a necessary party to suit. Issues 6 and 7 were answered against the Plaintiff that the Plaintiff is not entitled to the Suit claim. The Plaintiff is not entitled to claim interest. In the result, the suit was dismissed against the Plaintiff. Therefore, aggrieved by the judgment and decree passed by the learned III Additional Judge, City Civil Court, Chennai, the Plaintiff had filed this Appeal raising the following grounds that the trial Court miserably failed 10/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 to consider the following facts:
(1) Plaintiff had made several payments on account to the Defendant-1 in respect of container services rendered by the Defendant-1 in clearing of consignments of the Plaintiffs customers from Chennai Port.
(2) The consignments were carried through the containers belonging to the Defendants.
(3) The Plaintiff had made huge deposit amounts with the Defendant-1 for the container services rendered by the Defendants for the period from 20.04.1995 to 13.11.1997.
(4) The Defendant-1 used to adjust the amounts under a running account in the name of the Plaintiff against the debit notes.
(5) The Defendant-1 raised debit notes without any basis without conducting any pre-survey or post survey or joint survey.
(6)The trial Court failed to consider that the dispute between the parties arose from transportation of goods and the provisions of the Carriers Act is applicable to the case.
(7) The trial Court misconceived and misunderstood the subject matter and arrived at a conclusion that as per Section 10 of the Carriers Act, no notice was issued by the Plaintiff.
Therefore, the suit is not maintainable.
(8)The trial Court totally went wrong in holding that there is no privity of contract between the Plaintiff and the Defendant- 1.
(9)The trial Court misconceived in understanding the issues involved in the suit.
(10)The trial Court erred in holding that the suit is not maintainable in view of Section 10 of the Carriers Act. Even though the Defendants have not set up any case of transportation of goods to attract the provisions of the Carriers Act.
11/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 (11)The trial Court committed error in holding a different case outside the scope of the pleadings in the plaint and the written statement and deciding the suit against the Plaintiff.
(12)The trial Court failed to see that the Plaintiffs had made all the payments from their own account that too under a running account of Defendant-1. Only to give reference to the payments, the importers names were mentioned in the letters.
(13) The trial Court failed to note that no payments were ever made by the Importers directly to the Defendant-1.
(14) The trial Court failed to consider that all debits and credit in connection with the suit transactions were made only between Plaintiffs and Defendant-1. Therefore there exist a clear privity of contract between the Plaintiff and the Defendant-1.
(15) The trial Court failed to consider that the suit transactions were held between Plaintiff and Defendant-1 on principal to principal basis. Therefore the question of agency as per Section 230 of the Indian Contract Act will not arise.
(16) The trial Court failed to consider that the debit notes were raised by the Defendant-1 only on the Plaintiffs and the Defendant-1 had adjusted the payments only against the deposits of the Plaintiffs in the running account.
(17) The trial Court failed to consider that the payment made by the Defendant-1 only to the Plaintiffs after adjustment of amount towards a debit notes. Therefore Plaintiffs have got every right to question the unreasonable and unlawful adjustments made by the Defendant-1 and also to claim the deposit amount made by the Plaintiffs.
(18) The trial Court failed to consider that the Defendant-1 had never had any transaction with the Importers either in receiving or refunding any amount.
(19) The trial Court failed to consider the documents filed by the Plaintiff particularly under Ex.A-4, Ex.A-5 and Ex.A-20 12/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 that the names of the Importers were mentioned only for the purpose of giving reference for the payments.
(20) All the deposit payments made by the Plaintiffs were clearly proved under Ex.A-26 and Ex.A-27, Bank passbook and relevant pages and endorsements were mentioned in proof of affidavit of P.W-1.
(21) It is important to note that it is quite impossible and unnecessary to implead all the customers / Importers even as a proforma Defendant in the suit, as they have nothing to do with the deposits made by the Plaintiffs.
(22) As far as the deposit made by the Plaintiffs are concerned there was no privity of any contract between the Importers and the Defendant-1.
(23) Even the balance in the particular deposit would be adjusted by the Defendant-1 against the amount payable for some other clearing and forwarding Agents.
(24) The Defendant-2 is added as a formal Defendant in view of the fact that his name was appearing in the letters issued by the Defendant-1.
(25) The trial Court failed to consider that the contention of the Defendant-1 that their Principal's name is one M/s.Norasia Line (Malta) Ltd and the Defendant-2 is not their Principal, were not proved by them. As a matter of fact, the alleged Principal's name Norasia Line (Malta) Ltd or their address or their constitution was not given in any of the letters, correspondence or documents of the Defendant-1. Nor was the same notified or furnished or disclosed to the Plaintiff at any point of time.
(26)The Plaintiff was never made aware that M/s.Norasia Line (Malta) Ltd was the alleged Principal of the Defendant-1. Even in their written statement, the Defendant-1 had not chosen to give the address or any other details of their alleged Principal Norasia Line (Malta) Limited for reasons best known to them. 13/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 (27) The trial Court failed to see that the Plaintiff had issued a legal notice dated 04.05.1998 claiming that the Defendant-1 was liable to pay the sum of Rs.7,78,702/- to the Plaintiff and the Defendant-1 had issued a reply through their lawyer dated 20.06.1998 wherein they never disputed the amount so adjusted by them. They had admitted the fact that the containers belong to the Defendant-1 and the Plaintiff had availed the container services from the Defendant-1.
(28) The Defendant-1 had not whispered anything about their alleged Principal M/s.Norasia Line (Malta) Ltd and for the first time in their written statement, Defendant-1 is alleging about their Principal which is nothing but an afterthought made for the purpose of the case.
(29) The trial Court had committed error as it had not appreciated the categorical pleadings and proof adduced by the Plaintiff through documents under Ex.A-1 to Ex.A-27. The trial Court failed to consider that the Defendant-1 had not adduced any documents to substantiate their contention in the written statement.
(30) The trial Court erred in dismissing the suit in the light of ample oral and documentary evidence adduced by the Plaintiff in proof of the pleadings and in the absence of any proof on the side of the pleadings of the Defendants.
(31) The trial Court decided the suit only on misconception of law and facts. Therefore, the judgment and decree of the trial Court has to be set aside.
16. In support of his contention, the learned Counsel for the Appellant relied on the reported decision in the case of M/s.Sri Saravana Shipping Services Pvt.Ltd v. M/s.Shaw Wallace reported in 2010 1 CIJ 263.
17. It is the contention of the learned Counsel for the Appellant that 14/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 from 20.04.1995 to 13.11.1997, containers were used by the Plaintiff. Defendant-1 raised debit notes with the Plaintiff for Rs.7,70,782/-. During this period, the Plaintiff sought refund of the security deposit which was deposited by the Plaintiff while taking delivery of empty containers. Defendant-1 did not justify the debit note placed by the Plaintiff. Empty containers after destuffing was handed over to Defendant-1. At that time, survey should be conducted. If there was any damage, a post-survey would be conducted. Defendant-1 cannot claim damages for damage caused after the survey or if no survey was conducted. Survey should be conducted in the presence of the Plaintiff and the Defendant-1. Plaintiff caused several letters for refund of the amount. Also legal notice was sent on behalf of the Plaintiff. Still there was no response from the Defendant-1. Therefore, the suit was filed.
18. In the suit, the Defendant-2 remained Exparte. Defendant-1 alone contested the suit. Defendant-2 is only a formal party. Defendant-1 is the Principal. The identity of Defendant-2 was not disclosed by Defendant-1 even during the transaction. Even in the Written statement or in the reply notice, Defendant-1 had not stated about Defendant-2.
19. The learned Counsel invited attention of this Court to the debit note raised and other documents filed by the Plaintiff. In none of the above documents, the name Norasia line is mentioned. Defendant-1 is alleged to be 15/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 the Agent of Defendant-2. What is mentioned in the document. As per section 230 of Indian Contract Act, the Plaintiff is not entitled to file the suit is the claim made by the Defendant. Defendant-1 is the Agent of the Principal, Norasia Line Ltd.
20. The learned Counsel for the Appellant invited the attention of the Court to the evidence of the D.W-1 in cross examination. Debit note was also raised in the name of the Plaintiff. Payments were made only for the containers. Neither disputed the quantum for the container in which security deposit was made by the Plaintiff. The written statement of Defendant-1 clearly admitted the transaction and deposit by the Plaintiff. Consignor was not impleaded by the alleged Principal. That is the contention raised by the Defendant-1 and that cannot be acceptable defense.
21. The learned Counsel for the Appellant invited the attention of this Court to Ex.P-5 – Copy of the letter sent by the Plaintiff along with statement of Accounts (Pages 47, 48, 49 and 281 of the 'Index to Exhibits', where in the Bank statement of the Plaintiff reflects cheque number 077 dated 14.01.1995 issued in favour of Trans Asia. Similarly, reference was made to pages 50 and 282, wherein all the entries were properly mentioned. It is to be noted that the survey regarding damage was not carried out by the Defendant-1 in the presence of the Plaintiff at the time of returning the empty containers. The 16/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 proof affidavit filed by Defendant-1 does not prove the claim of the Defendant. No documents had been filed as proof of the same.
22. The learned Counsel for the Respondent submits that the case of the Plaintiff as made out in the plaint is not true. When the Consignments are loaded in a different port outside India, particularly metal scraps, they just admit all the containers without any protection. Thereby during the course of transportation, the containers become damaged due to protruding rods, scraps and metal sheets which is of common knowledge to the persons in the shipping line. They are all aware of the damage caused to the containers. Invariably, the containers suffer damage.
23. The learned Counsel for the Respondent invited the attention of this Court to the letter addressed by Defendant-1 to all the Shipping agencies, forwarding and clearing agencies regarding the survey of the containers. Therefore what had been projected by the Plaintiff is not true. The Plaintiff as clearing and forwarding agent takes the risk for clearing of the consignments at the port where it is. The forwarding and clearing agents act on behalf of the consignees. They interact with the Customs Authorities and Port Authorities and they face the risk of paying necessary charges for containers while loading, transporting and shipments including the damages caused to the 17/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 containers.
24. The Defendants had pointed out the various heads under which the forwarding and clearing agents pay necessary charges. Therefore, in the written statement, it was pointed out that proper and necessary parties were not impleaded in the suit. Still the Plaintiff did not take care to implead the necessary parties. After framing of issues, the learned Judge on proper assessment of the evidence, rejected the claim of the Plaintiff and dismissed the suit. Therefore the learned Counsel for the Respondent submits that the judgment of the learned III Additional Judge, City Civil Court, dismissing the suit is a well reasoned judgment that does not warrant any interference by this Court.
25. It is the contention of the learned Counsel for the Respondent that the judgment of the learned III Additional Judge is a well reasoned judgment that does not warrant interference by this Court and thus, the Appeal also has to be dismissed. The learned Counsel for the Appellant submitted that the contract between the Plaintiff and Defendant is admitted.
26. Written arguments filed on behalf of the Respondents: 18/50
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(a). All the averments and allegations contained in the above suit are denied except those which are specifically admitted as here under. The above suit is not maintainable either in law or in facts. The suit is in the nature of settlement of accounts, but the relief sought for is in the nature of realization of money. Hence, the suit is not properly instituted and not maintainable on that account. The valuation shown in the plaint is not correct. The suit is also bad for mis-joinder and non-joinder of parties.
(b). The Appellant is only a clearing and forwarding Agent (C & F Agent) as admitted in the plaint by the Appellant himself. A clearing and forwarding Agent is only an Agent of its Principal and all acts done by it are done on behalf of its Principal as authorized by them and it has no independent existence apart from its Principal. In the present case, the Appellant had approached this Respondent only in its capacity as a clearing and forwarding Agent of its Principals / importers.
(c). A point germane to this Appeal is the nature of goods imported in the Containers namely a Melting Steel Scrap which is evidenced by the Bill of Lading (Pg. 99 of the Document type set). The inherent vice of the cargo is 19/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 such that it causes damage to the containers as they are stuffed directly into the container and not in boxes or in any other packing material. The Metal Scrap consists of rods, filings, sheets and other rough cut metal pieces which causes holes, tears and other such damage to the containers.
(d). These Metal Scrap Cargo is stuffed in Containers which are owned by this Respondent Principals and are sent by the Shipper / Consignor from the Port of Loading by various vessels to the Port of Delivery. The Importers / Consignees appoint C & F Agents to do the paperwork with the customs, port and Shipping line/steamer Agents for clearing their cargo and such clearing Agents do the paper work for clearing the cargo and the Appellant herein is one such C & F Agent. But all charges in relation to the clearing work of the Consignees' cargo and other incidental charges are borne by such Consignees / importers and not by the C & F Agents and as such the Debit Notes are raised in the name of the Consignee. In case the Consignee does not pay the Debit Note, the Respondent Steamer Agent on behalf of its Principal can seek a remedy only against the Consignee. The C & F Agents collect fees / service charges for their C & F work from the Consignees /importers. Infact, the contract of affreightment in the Shipping industry is between the Shipping line and the Consignees, and not with the Appellant or this Respondent. It is 20/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 submitted that the contract of affreightment vide the Bills of Lading issued by this Respondent's Principal Shipping line, on which the Appellant is relying is between the Principal Shipping line and the various importers / Consignees named in the respective Bills of Lading and a C& F Agent like the Appellant has no role in such contract. There is no privity of contract between the answering Respondent and the Appellant and also between this Respondent's Principal and the Appellant. Hence the Appellant has no right to file the above suit without any authorization or subrogation from the Consignees. All the charges / fees in relation to the cargo are paid by the Consignees to the Shipping line and a C & F Agent like the Appellant and even a steamer Agent like the 1 Respondent is only an intermediary in such transaction. A clearing and forwarding Agent is only a facilitating Agent for enabling the Consignees to make such payment / charges to the Shipping lines. All charges relating to the consignments/cargo are paid by the Consignees to the Shipping line and the same may be made in direct or through C & F Agents.
(e). In the present case, the Appellant had not made any payments independently i.e. on its own account, the payments which were made by the Appellant in the above case was on behalf of its Principals / Consignees. Just because a clearing and forwarding Agent makes such payment to the Shipping 21/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 line on behalf of its Principals / Consignee, it will not confer any right on a clearing and forwarding Agent to seek for accounts. Such right to seek for accounts for such payments can be made by the clearing and forwarding Agents only on behalf of its Principals' /Consignees'. In the present case also, the Appellant who is only a C & F Agent, is seeking for accounts in relation to the payments made for clearing of consignments / cargo of its Principals / consignee'. The Appellant took a calculated business risk by advancing sums of money for their clients/ Consignee. Hence, the Appellant has no legal right to seek for any account or seek return of any amount; that right is vested with its Principals / Consignees'. The Appellant has no right to step into the shoes of its Principals / consignee'. Hence, the suit is not maintainable on that account. Moreover, without making its Principals/Consignees parties to the above suit, the above suit is bad for non-joinder of necessary parties.
(f). It is also submitted that this Respondent is only a steamer Agent of its disclosed Principal Shipping line. This Respondent was acting only in the capacity of its disclosed Principal. All the work done by this Respondent in the above case was on behalf of its Principal. The containers in the above suit belongs to this Respondent's Principal Shipping line and all charges relating to container repair is collected by this Respondent from the Consignees/ 22/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 importers directly and through their C & F Agents. Appellant made payment on behalf of this Respondent's Principal and this Respondent is not the beneficiary of such payments; rather this Respondent is only a facilitating Agent for collecting monies from the Consignees' C & F Agents on behalf of its Principal. Hence, this Respondent is clearly exempted from any liability whatsoever as per Sec. 230 of the Indian Contract Act. Hence, if at all the Appellant has any right (which is not admitted) to seek for accounts and refund of money, the right would lie only against this Respondent's Principal.
Hence, this Respondent is an unnecessary party to the above suit. Moreover, the Appellant has not made the Principal of this Respondent, i.e. Norasia Line (Malta) Ltd a party to the above suit. Hence, the suit is bad for non-joinder on that account also. In fact the 2nd Respondent in the suit is not the Principal of this Respondent. This Respondent's Principal at that time (i.e. till 1998) was Norasia Line (Malta) Ltd. Even though the name of the Principal Shipping line in the Bills of Lading is mentioned as Norasia Lines the real name of this Respondent's Principal carrier at that time was Norasia Line (Malta) Ltd. Hence without making Norasia Line (Malta) Ltd a party to the above suit, the above suit is not maintainable. Moreover, at present, this Respondent is not the Agent of the said Norasia Line (Malta) Ltd. Further the Appellant chose to forgo the enabling provision of Or. 1R 10 CPC as this Respondent had 23/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 declared its Principal in the Written Statement filed before the commencement of the Trial in the suit before the Lower Court.
(g) With regard to the allegation of deposits of huge sums of money, it is reiterated that these deposits were on behalf of the Consignee towards all the charges that are encapsulated in the Debit Notes (Pg 5-36) which include Detention Charges, Port Storage Charges and Container Repair Charges among many such charges. Moreover, the value of the Container Repair Charges is directly proportional to the number of Containers mentioned in the Debit Note. The allegation that deposit amount is being collected from the clearing Agents when the containers are cleared is false and hence, denied. In fact, as already stated, the Appellant makes payment of such amount to this Respondent on behalf of its Principals / Consignees' and the Appellant is only a facilitating Agent for enabling its Principals / Consignees to make such payment / charges to the Shipping lines through this Respondent. It is respectfully submitted that the standard practice in the Shipping business in the case of an FCL/FCL shipment is that when an import container arrives in the port, the Consignees / their clearing Agents obtains the Delivery Order from the steamer Agent for taking delivery of the containers containing their cargo and at the time of obtaining delivery orders, the steamer Agent/ this 24/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 Respondent on behalf of its Principal Shipping line obtains deposit amounts/ cheques from such Consignees directly or through their clearing Agents. It is submitted that the containers are released to the Consignees named in the respective Bills of lading and they will be responsible for the safe return of the containers, otherwise they will become answerable for any defect in the containers.
(h) When the Consignees' delivers back the empty containers to the steamer Agents, the amount will be refunded after deducting the charges incurred when such containers were in the custody of the Consignees. These charges include repair charges for any damages to the containers, cleaning charges for such containers, if any and demurrage charges for such containers, if any etc. It is respectfully submitted that the import containers does not belong to this Respondent, rather they belong to the Principal Shipping line of this Respondent and the said containers' are dutiable and the said containers are landed in India on the strength of a Bond executed in favour of the President of India that the same will be re-exported out of India within 6 months of landing. If the same is not re-exported within the said time, the Respondent will become liable. Hence, the containers cannot be released to the Consignees without collecting any security. Once a container is returned 25/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 without any defects within the stipulated free period time by the Consignee, this Respondent as its Principal Shipping line's Agent is bound to return the security. If the container is returned by the Consignee with defects and / or if the container is returned after the stipulated free period, this Respondent is duty bound to collect / realize the actual due from the Consignee and to settle it with its Principal. The amount collected or recovered by the I"Respondent as Agent of the 2nd Respondent can't be utilized or appropriated by the first Respondent as the same belongs to their Principal, whereas the first Respondent is entitled only for the remuneration for their services rendered to their Principal as per the fixed tariff specified in the Agency Agreement
(i) The allegations that the usual practice of assessing the damages to the containers is by conducting a pre-survey and a post survey in the presence of the Appellant is false and hence denied. It is respectfully submitted that as per the normal Shipping practice, such terms are not in existence. It is respectfully submitted that stuffing Survey is usually conducted when a container is stuffed by the shipper / exporter at the foreign port and the Shipping line/ its Agents have no role in such survey. In the discharge port, when any damage claim is raised when a container is taken to the Consignee's premises for destuffing, a survey will be conducted with the participation of the Consignees / its Agent 26/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 and their surveyors, Shipping line / its Agents and their surveyors and the insurer / their surveyors and such survey is called a Joint Survey. It is respectfully submitted that a pre-survey as alleged by the Appellant is not usually the norm and such survey is conducted only on the specific request of the Consignee prior to taking delivery of the container. Likewise, a post survey is conducted only if a pre-survey was conducted on a damaged container. In fact, the Appellant had never approached this Respondent for conducting such type of surveys even though this Respondent has issued Standing Instructions (Pg 63) that such a specific request must be made. Moreover, while loading and discharging the containers from the vessel, the respective Ports will issue Equipment Interchange Report (EIR) to each and every container loaded or discharged, wherein the Ports will state specifically if any damage to the container is noted. Since no damage is noted either by the port or by the Consignee & the Appellant while taking delivery of the laden import containers, any damage is noted when it is returned then there is no question as to when & in whose custody the said damage has happened. So naturally the 1st Respondent is duty bound to collect respective repair charges in this account from the Consignee either directly or through their Agents like the Appellant. The repair charges and other charges collected by the first Respondent on behalf of their Principals will be settled with the respective 27/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 vendors as per the instructions and standing orders of the Principals.
(j) It is also submitted that once a container is taken delivery by the Consignees / its C & F Agents, then it is presumed that the container is free from defects or deemed to be without defect. So, it is obligatory on the part of the Consignees / its C & F Agents to notify the defects, if any to the container before taking delivery of the container from the port for destuffing. In the present case, no such claim had been made by the Consignees or their Agents i.e. the Appellant. Moreover, the shipments in the above case being FCL/FCL shipments, the transportation of the containers by Trailers from the container yard of the port will be at the risks and costs of the Shippers / Consignees. Hence, there is ample chance for damage to the containers whilst the same is in the custody of the Consignees. Hence, when such containers are returned back, the quantified container repair vendor of the Principal Shipping line will assess the damages, if any and they will assess the repair charges and based on their repair charges, this Respondent as the Agent of the Principal Shipping line collects the amount from the Consignees / their C & F Agents. Moreover, the cargo of the Consignees in connection with which the Appellant had done the clearing and forwarding work is heavy Melting Steel Scrap as can be seen from the Bill of Lading (Pg 99). As the cargo carried in the containers are steel 28/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 scrap without any packing, there are chances that the containers could get damaged and indeed there were damages when the containers were returned.. Hence, the allegation in para 6 of the plaint that there was no damage to any of the containers is false and hence denied. Since the containers are used for international trade they have to not only be in seaworthy condition but also according to the IICL standards.
(k) With regard to the allegations of the estimation of the repairs, it is most respectfully submitted that the standard practice is that while the empty containers are returned to the Shipping line / steamer Agent, an estimate of repair is taken and an acknowledgment of status of delivery of the container is obtained from the Driver of the Trailer who carried the container and who is the representative/Agent of the Consignee or his clearing Agent. After delivery of the empty container, when the Consignee approaches the Shipping line / steamer Agent for claiming back his deposit cheque, an estimate of repair, if any, is shown and if any dispute is raised, then the Consignee is taken to the storage yard of the containers for a physical verification of damage, immediately upon request. It is also submitted that normally any disputes with regard to damage and assessment of damage has to be done immediately on receipt of the debit note along with request for joint survey disclosing the surveyors of the Consignees. Otherwise, the container will be released to 29/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 another exporter for stuffing their export cargo or re-exported after due repairs.
(l) In the present case, no Consignee had ever raised such dispute and the Appellant has also not raised any such disputes at the relevant time. Moreover, the containers cannot be kept in India beyond the period of 6 months as already stated. The Appellant knowing well about the above said fact, has raised the allegation that no damage has been caused to any of the containers only through this suit and this shows that it is only an afterthought made with the intention to knock out illegal gains. This Respondent denies the allegation that this Respondent had wrongly claimed fictitious amounts and adjusted it again the deposits available with it.
(m) The allegations that this Respondent was reluctant to return the deposit amount is false and hence, denied. As already stated, there was no practice of this Respondent collecting such deposit The allegation that amount is due to the Appellant from this Respondent is false and hence, denied. The alleged Statement of Accounts (Pg 103) is only a listing of all the Container Repair Charges enumerated in the Debit Notes. This not a true representation of the accounts. This Respondent is not bound to pay any amount to the Appellant as claimed in the suit. The Appellant is also not entitled to get any interest on the amount claimed. The Appellant is not entitled to get any reliefs 30/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 as prayed for.
Point for Consideration:-
Whether the Judgment of the learned III Additional Judge, City Civil Court, Chennai in O.S.No.14299 of 2010 dated 11.10.2012 is perverse warranting inference by this Court?
27. For the sake of convenience, the parties to the dispute are referred to as per the status before the trial Court. Plaintiff before the trial Court is as Appellant and the Defendant before the trial Court is the Respondent herein.
28. Perused the evidence of the Managing Director of the Plaintiff's Company as P.W-1, he was cross-examined by the learned Counsel for the Defendant. During the evidence of the Plaintiff, the documents were marked as Ex.A-1 to Ex.A-27. He was cross-examined on behalf of the Defendant. In the cross-examination, he had admitted that he had issued a cheque in favour of the first Defendant. The suggestion was that the payments were to be made to the second Defendant and the first Defendant had handed over the amount to the second Defendant. The Plaintiff as P.W-1 claimed ignorance regarding handing over the money by the first Defendant. The Plaintiff as P.W-1 admitted that Ex.A-26 and Ex.A-27, originals were not filed as they had been 31/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 filed in different Suits and the certified copies alone were filed. The suggestion is that the claim made under Ex.-26 and Ex.P-27 is not maintainable was denied by P.W-1 in his cross-examination. From the cross- examination, nothing was elicited in favour of the Defendant-1. Ashly Antony, the Assistant Manager (Legal) of the M/s. Trans Asian Shipping (P) Ltd is the first Defendant in the Suit was examined as D.W-1. The affidavit filed by D.W-1 contained the averments stated in the written statement of the first Defendant. It is the claim of the D.W-1 that the Plaintiff has not made the principal of the first Defendant that is Norasia Line (Malta) Ltd.,/Party to the Suit. Therefore, the suit is bad for nonjoinder and the suit is to be dismissed. Further, it is stated that the first Defendant is not the agent of Norasia Line (Malta) Ltd., The claim made against the first Defendant is false, the first Defendant is not bound to pay any amount to the Plaintiff. In the cross- examination, he admitted that he could not produce any document containing the disclosure of the Principal's name. Ex.P-9, Ex.P-12 and Ex.P-13 were issued by first Defendant. In those documents also D-1 signed as an Agent but did not disclose the Principal's name. In Ex.P-9 and Ex.P-13, the second Defendant's Trademark was only mentioned, but not the address or entity. He had denied the suggestion that the first Defendant had acted as an Agent of an undisclosed Principal viz., the second Defendant. To the suggestion that the 32/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 first Defendant is the Agent of Norasia Line (Malta) Ltd., D.W-1 clearly stated that he cannot say yes or no similarly to the suggestion that the entire Suit transaction transpired between the Plaintiff and the first Defendant. He claimed that he did not have the idea or any documents to show that the first Defendant had any transaction with the consignee relating to the Suit transaction. Also, he claimed that he could not say yes or no to the suggestion made to him that the first Defendant was having any transaction with any of the consignees. Also, he answered that he could not say yes or no to the suggestion that the first Defendant had collected and received all the payments and deposit amounts with regard to the Suit transaction only from the Plaintiff. The suggestion that the first and second Defendant are severally and jointly liable to pay the Suit claim by the Plaintiff was denied by him. He admitted that the Suit amount collected was accounted to their then Principal Norasia Line (Malta) Ltd., He admitted no accounts were produced by the Defendant as proof of the accounts. He admitted that he is disclosing that he had accounted the Suit transaction amount to the Norasia Line (Malta) Ltd.,. He denied the suggestion that the amounts collected with regard to the Suit transaction from the Plaintiff were appropriated by the first Defendant for themselves. He had also denied the suggestion that the first Defendant is the absolute beneficiary of money collected in the Suit transaction. He also denied 33/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 the suggestion that the first Defendant is not liable to answer the Suit claim. He had clearly stated that he could not give an answer to the suggestion made to him that the containers used for the Suit transaction have been re-exported because the connected documents are not available in the office of the first Defendant. He had clearly stated that he could not answer the question of whether the first Defendant had made the containers sea-worthy as per IICL Standard pertaining to the subject transaction. Also, he admitted that he could not answer the suggestion that the first Defendant had not done any repairing or maintenance work to the subject container because the same was handed over to the first Defendant in seaworthy condition. He admitted that the first Defendant had nowhere stated that none of the subject containers had become unseaworthy. He denied the suggestion that the first Defendant had made unlawful adjustments under the guise of repairing charges, damages and cleaning charges to the subject containers against the deposit amounts and other monies collected from the Plaintiff. He had denied the suggestion that for the purpose of this case, he was giving false evidence. He admitted that the Plaintiff required a Survey Report from the first Defendant and they did not have any record to show that such Report was supplied to the Plaintiff. He claimed that he could not say yes or no to the suggestion made to him that the first Defendant had not at all given the particulars about the Survey Report or 34/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 any details for the alleged damages, repairing charges and cleaning charges for the subject container. He denied the suggestion that the Suit has to be decreed.
29. On perusal of the documents, it is found that the Plaintiff had claimed the refund of the amount that he had paid as excess for the various containers on behalf of the consignee. It is the subject matter of the dispute that when the containers are taken by the consigners for exporting iron scraps, they are not safely dispatched in safe boxes. They are roughly stuffed into the containers during the course of shipping. Because of the careless stuffing of metal scrap rods inside the containers due to the movement of the ship as well as in the lorries, the containers get damaged. Therefore, for repairing of the containers after the consignee had taken the consignment, damage was caused to the containers and leased out by the consignor at the port of loading. The nature of metal scraps is such that it is known to cause damages to the containers as when the containers are stuffed with metal scrap outside India at the port of loading, it is loaded with metal scraps, rods and metal sheets and thereby, the containers are invariably damaged unlike other goods carried in wooden stacks. When the containers are handed over to the clearing and forwarding Agents after emptying the contents of the consignment, the emptied containers are subjected to repairs due to the damages caused to the containers in the course of the movement of the consignment. Therefore, the 35/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 repairing cost is imposed upon the consignee/ the Principal of the clearing and forwarding Agent by the Plaintiff and the Agent of the Principal, the owners of the containers, the second Defendant herein is the subject matter of the dispute. The claim made by the Defendant in the written statement is that the difference of the amount imposed on the Plaintiff has to be collected from his Principal consignee and he cannot maintain the Suit against the first Defendant. In the cross-examination, D.W-1 was unable to explain or deny the claim made in the written statement by the Defendant. Therefore, the Plaintiff had proved his case as per evidence. Nothing was suggested in the cross- examination of P.W-1 whereas the Defendant was unable to answer various questions raised by the Plaintiff as per the Plaint averments. In the light of such cross-examination, the learned III Additional District Judge dismissing the Suit is found perverse.
30. The Plaintiff had produced all the documents regarding the exchange between the parties. The claim made by the Defendant in the written statement that the Plaintiff had to implead all his Principals as co-Plaintiff and also impleaded the Principal of the first Defendant without mentioning the name is found unfair in the light of the evidence available before the Court. The Plaintiff had clearly impleaded Norasia Line (Malta) Ltd., which the Plaintiff 36/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 had himself taken out from the reply notice sent by the first Defendant. Now in the evidence of D.W-1, he claims that Norasia Line (Malta) Ltd., was mentioned only in the affidavit. In the written statement, it is stated that it is a standard practice in the Shipping business that in case of an FCL/FCL shipment that when an import container arrives at the port, the consignees/their clearing Agents obtain delivery orders from the steamer Agent for taking delivery of the containers containing their cargo and at the time of obtaining delivery orders, the steamer agent/this Defendant on behalf of its Principal shipping line obtains deposit amounts/cheques from such consignees directly or through their clearing Agents. It is submitted that the containers are released to the consignees named in the respective Bills of lading and they will be responsible for the safe return of the containers, otherwise, they will become answerable for any defect in the containers. When the consignees delivered back the empty containers to the streamer Agents, the amount will be refunded after deducting the charges incurred when such containers were in the custody of the consignees. These charges include repair charges for any damages to the containers, cleaning charges for such containers, if any and demurrage charges for such containers, if any, etc. It is respectfully submitted that the import containers don't belong to this Defendant, rather they belong to the Principal shipping line of this Defendant and the said containers are dutiable and when 37/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 the said containers are landed in India on the strength of a Bond executed in favour of the President of India, the same will be re-exported out of India within six months of landing. If the same is not re-exported within the said time, the Defendant will become liable. Hence, the containers cannot be released to the consignees without collecting any security. Once a container is returned without any defects within the stipulated free period of time by the consignee, this Defendant as the Principal shipping line's Agent is bound to return the security. If the container is returned by the consignee with defects and/or if the container is retained after the stipulated free period, this Defendant is duty bound to collect/realise the actual due from the consignee and settle it with its Principal.
31. Also, it is stated in the written statement that the usual practice of assessing the damages to the containers is by conducting a pre-survey and a post survey in the presence of the Plaintiff is false and hence denied. As per the normal shipping practice, such terms are not in existence. It is respectfully submitted that a Stuffing Survey is usually conducted when a container is stuffed by the shipper/exporter at the foreign port and the shipping line/its Agents have no role in such survey. In the discharge port, when any damage claim is raised then the container will be taken to the consignee's premises for 38/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 destuffing and a survey will be conducted with the participation of the consignees/its Agent and their surveyors, shipping line/its Agents and their surveyors and the insurer/their surveyors. Such a survey is called a Joint Survey. It is respectfully submitted that the pre-survey as alleged by the Plaintiff is not usually the norm and such survey is conducted only on the specific request of the consignee prior to taking delivery of the container. Likewise, a post survey is conducted only if a pre-survey is conducted on a damaged container. In fact, the Plaintiff had never approached this Defendant for conducting such types of surveys.
32. It is also submitted that once a container is delivered by the consignees/its clearing and forwarding Agents, then it is presumed that the container is free from defects or deemed to be without defect. So, it is obligatory on the part of the consignees/its clearing and forwarding Agents to notify the defects, if any to the container before taking delivery of the container from the port for destuffing. In the present case, no such claim had been made by the consignees or the Plaintiff. Moreover, the shipments in the above case being FCL/FCL shipments, the transportation of the containers by trailers from the container yard of the port will be at risk and cost of the shippers/consignees. Hence, there is ample chance of damage to the containers 39/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 while the same is in the custody of the consignees. Hence, when such containers are returned back, the quantified container repair vendor of the principal shipping line will assess the damage, if any and they will assess the repair charges and based on their repair charges, this Defendant as the Agent of the principal shipping line collects the amount from consignees/their clearing and forwarding Agents. Moreover, the cargo of the consignees in connection with which the Plaintiff had done the clearing and forwarding work is a heavy Melting Steel Scrap as can be seen from the Document No.2/Bill of Lading annexed with the Plaint. As the cargo carried in the containers is steel scrap without any packing, there are chances that the containers could not damaged. Hence, the allegation in Para 6 of the Plaint that there was no damage to any of the containers is false and hence denied.
33. Therefore, the evidence of D.W-1 that he cannot say yes or no to the suggestions of the Plaintiff is found to be an evasive answer. The claim made by the Defendant that the Suit against the first Defendant is not maintainable and the second Defendant is not a proper party is also not acceptable. The first Defendant has to clearly notify the Plaintiff as to the Principal of the first Defendant. He had not mentioned the name of his Principal in his exchange of reply notice under Ex.A-22, Ex.A-23 and Ex.A-25. The notice issued by the Plaintiff before filing of the Suit clearly mentions the claim made by the 40/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 Defendant that there had been damages to the containers. If there had been damage, it is for them to conduct a joint survey in the presence of the Plaintiff regarding the damage caused to the containers by the consignor stuffing the containers with iron scrap and to clean, the same to repair the damages. Therefore, the claim made by the Plaintiff under Ex.A-22 cannot be denied. In the reply, it is stated that the Suit if any instituted by the Plaintiff will be resisted but in the cross-examination, D.W-1 was unable to answer the suggestions put to him by the learned Counsel for the Plaintiff. It is to be noted that D.W-1 was the Assistant Manager (Legal) of the first Defendant Company. Therefore, he is aware of the legal issues involved in this case. D.W-1 was unable to answer the suggestions of the Plaintiff. Still, the learned III Additional District Judge had dismissed the claim on the grounds of technicalities raised by the Defendant based on mis-joinder and non-joinder of the parties. As Agent of the shipping lines, the first Defendant has to clearly mention who his Principal is and thus, without mentioning the same and denying all the claims made by the Plaintiff is found unfair. The Plaintiff had clearly given out his case by filing documents under Ex.A-1 to Ex.A-27. Therefore, the burden shifted on the Defendant. In the cross-examination, nothing was elicited in support of the Defendant. Under those circumstances, when the burden shifted on the Defendant to disprove the case of the Plaintiff, 41/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 D.W-1 was unable to answer the suggestions of the Plaintiff as the Defendant was unable to say yes or no to any of the suggestions. In the light of those evidence, the claim made by the Defendant that the Plaintiff had not impleaded the principal of the first Defendant in Norasia Line (Malta) Ltd., as proper and necessary party will not help the Defendant to wriggle out from the claim made by the Plaintiff. The claim made by the Plaintiff is found proper. Further, the ruling cited by the learned Counsel for the Appellant in the case of M/s. Sri Saravana Shipping Services Pvt. Ltd., Vs. M/s. Shaw Wallace Company Ltd., & Anr. (reported in 2010 1 CIJ 263) appears squarely to the facts of the present case. The relevant portion is extracted hereunder:-
“(A)Indian Contract Act, 1872, (9 of 1872)-Sec.69, 70, 230- Indian Evidence Act, 1872(1 of 1872)-Sec.34-Agency-Agent- Agent coupled with interest-Suit-Locus standi-Cause of action- Misjoinder of cause of action-Non-joinder of parties-Unjust enrichment-Repayment-Interest-Evidence-Secondary evidence- Books of account-Ledger-Plaintiff acted as clearing and forwarding agent for some importers and the 1st Defendant acted as agent for the shipping company-Plaintiff handled few import transactions through the 1st Defendant for the benefit of its customers and had paid various payments and statutory charges to the 1st Defendant out of its funds-Later, Port Trust reduced the statutory charges with retrospective effect which also covered the transactions done by the Plaintiff through the 1st Defendant- Plaintiff had also paid security amount for the containers taken by it from the 1st Defendant and on the return of the containers the security amount were also due to be returned-Plaintiff filed suit demanding the return of the reduced port charges and security deposit-1st Defendant contended that the Plaintiff was only an agent for many importers, the amount mentioned in the Plaintiff was due only to the importers and only they may 42/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 maintain the suit - 1st Defendant further contended that litigation was pending in respect of the statutory charges and in case of failure of the litigation, the 1st Defendant might face liability and the obligation for refund would arise only on the successful completion of the litigation-1st Defendant also contended that the amount due was in respect of many small transactions and all of them cannot be clubbed together in a single suit-Held, when the Plaintiff had paid the amount out of its funds, the Plaintiff was entitled to maintain the suit in its name since it was an agency coupled with interest-The challenge in the writ petition was regarding the excess charge and when the charge was reduced by the port, the 1st Defendant was not entitled to retain it under the principle of doctrine of unjust enrichment-Since the amount due on various bills were of similar nature, all the claims could be joined together in a single suit-1st Defendant was directed to repay the amount with 12% interest per annum.
B)Indian Contract Act, 1872, (9 of 1872)-Sec.69, 70, 230-
Agency-Agent-Agent coupled with interest-Termination-When an agent had paid money from its funds for the benefit of the principal and the money so paid had not been refunded by the principal to the agent, the agency becomes an "agency coupled with interest"-"Agency coupled with interest" cannot be terminated without the interest of the agent in the agency.
The payments were made only by the Plaintiff without obtaining any advances from the importers. There is no evidence adduced contra nor any material has been placed by the Defendants to show that there was no interest of the Plaintiff coupled with the agencies. .............The Plaintiff had acted on behalf of the importers as per the agency created between them and the Plaintiff had made the payments to the first Defendant by issuing various cheques and therefore it could be found that the monies of the Plaintiff were paid initially by the Plaintiff and the interest has been created in favour of the Plaintiff in the agency. Therefore, the said agency cannot be terminated without the interest of the Plaintiff in the agency. Para 30 (C)Indian Contract Act, 1872, (9 of 1872)-Sec.69, 70, 230- Agency-Agent-Agent coupled with interest-Suit-Locus standi- 43/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 Principal-Impleading-Necessary party-Non-joinder of parties-In an agency coupled with interest, the agent can maintain the suit without impleading the principal.
Since the Plaintiff is found to be an agent coupled with interest and he is entitled to sue against the Defendants there is no necessity of impleadment of all the importers for the purpose of claiming the relief mentioned in the plaint. Therefore, the bar of an agent to file any suit against any person liable to pay either to the agent or to the principal under Section 230 of the Indian Contract Act cannot be applied to the present case. Since the Plaintiff is found to be an agent coupled with interest and he is entitled to sue against the Defendants there is no necessity of impleadment of all the importers for the purpose of claiming the relief mentioned in the plaint. Therefore, the bar of an agent to file any suit against any person liable to pay either to the agent or to the principal under Section 230 of the Indian Contract Act cannot be applied to the present case. Para 32 (D)Indian Evidence Act, 1872(1 of 1872)-Sec.34- Evidence-Second evidence-Books of account-Ledger-Statement of accounts is a secondary evidence in the place of the ledger-To admit the statement of accounts of a concern as secondary evidence, the person filing it should explain the reason for the non-production of the ledger.
The tenor of the judgements referred above would go to show that the statement of accounts could be considered as secondary evidence in the place of the ledgers maintained by the Plaintiff and, therefore, without any explanation for non- production of the said ledgers the statement of accounts cannot be admitted in evidence. Para 39 (E)Indian Contract Act, 1872, (9 of 1872)-Sec.69, 70- Statutory charges-Refund-Repayment-Unjust enrichment- When a person gets refund of the charges or money paid by him on behalf of another and already got such payment reimbursed from that beneficiary, such refunded amount should be returned to the person who actually borne the liability.
44/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 The doctrine of unjust enrichment would also apply to the present case. When the second Defendant had issued notification reducing the tariff charges with retrospective effect, what were all the payments made by the Plaintiff, covered by the notification issued under Ex.P-9 should not have been retained by the first Defendant who acted on behalf of the second Defendant. If the first Defendant had retained the said amount without paying it to the Plaintiff as per the difference of tariffs in between Ex.P-1 and Ex. P-9 notifications, which would certainly amount to unjust enrichment. Para 40”
34. The facts of the reported ruling are squarely applicable to the facts of this case. Therefore, the Judgment of the learned III Additional Judge, City Civil Court dismissing the Suit on technicalities of law without considering the pleadings and the evidence is found perverse and the same is set aside.
35. The arguments put forth by the learned Counsel for the Respondent is answered by the Judgment in the case of M/s. Sri Saravana Shipping Services Pvt. Ltd., Vs. M/s. Shaw Wallace Company Ltd., & Anr. (reported in 2010 1 CIJ 263) which is a similar case filed by the same Plaintiff on the Original Side of this Court. Therefore, the Judgment of the learned III Additional Judge, City Civil Court, Chennai is set aside in the light of the above reported case of this Court. The arguments of the learned Counsel for the Respondent/Defendants is rejected in the light of the judgment of the above reported case. The Suit is decreed as prayed for with interest.
36. The various contentions in the written statement had been raised in 45/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 the above reported case also. The learned Judge of this Court had answered the issues in favour of the Plaintiff. Therefore, in the light of the very same Judgment, the findings given by the learned III Additional Judge, City Civil Court in answering all the issues except Issue-5 against the Plaintiff is found to be not proper. The learned Judge had not properly appreciated the evidence both oral and documentary evidence of both the Plaintiff as well as the Defendant and had misdirected himself and answered the Issues against the Plaintiff by ignoring the facts, the contents of the written statement, as well as exchange of notices by the Defendant, which were only vague replies. Therefore, in the light of the above discussions, point for consideration is answered in favour of the Plaintiff and against the Defendant as the Plaintiff is the Agent of various consignees and is an Agent coupled with interest. Therefore, the Plaintiff as an Agent coupled with interest, he had paid behind all the various consignees. Therefore, he is within his right to claim the amount as an agent coupled with interest. The Agent can maintain the suit without impleading the Principal. The Defendant had not clearly stated that who the Principal of the first Defendant is. Therefore, the evidence of D.W-1 that D-2 is not the Principal also will not hold good. The suit is found maintainable in the light of the reported ruling in the case of M/s. Sri Saravana Shipping Services Pvt. Ltd., Vs. M/s. Shaw Wallace Company Ltd., 46/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 & Anr. (reported in 2010 1 CIJ 263). The suit is decreed as prayed for.
37. The learned Counsel for the Appellant had relied on the ruling in the case of Food Corporation Of India Vs. Baldev Kaur reported in AIR 1981 P&H 113. The relevant portion reads as follows:-
“5. As regards the questions as to whether the District Manager of the Food Corporation was competent to conduct the case on behalf of the Corporation, the learned Counsel for the Petitioner has referred to the Provisions of Order XXIX, Rule 1, Code of Civil Procedure, which prescribe that in suits by or against a corporation any pleading may be signed and verified on behalf of the Corporation by the Secretary or by any Director or other Principal Officer of the Corporation who is able to depose to the facts of the case. This provision nowhere empowers such an Officer to conduct the case on behalf of the Corporation. In fact, only the limited power to sign and verify the pleadings had been conferred upon the Officer. The Courts below were, therefore, quite correct in setting issue No.2 against the Petitioner.”
38. The written statement was filed by the Assistant Manager (Legal). Therefore, the learned Counsel for Appellant submitted that the written statement filed by the Assistant Manager (Legal) and the evidence let in by the Assistant Manager (Legal) is not maintainable as he is not a competent witness as per the reported ruling in the case of Food Corporation Of India Vs. Baldev Kaur reported in AIR 1981 P&H 113.
39. From the cross-examination, it is found that he has knowledge of 47/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 dealings between first Defendant and the second Defendant but he had wantonly evaded when he was confronted with facts regarding the law and practice involved in shipping and Clearing and Forwarding Agencies. Therefore, the person who filed written statement himself had volunteered as a witness, but he was unable to answer the questions put to him in cross- examination and he had clearly evaded answers. It is the suggestion put to him in the cross examination by the learned Counsel for the Plaintiff. It is pointed out that he had filed a written statement in which the averments are evasive denial of plaint averments but was unable to prove the case of the Defendants through proper and cogent evidence before the trial Court. The person who had volunteered as a witness took the risk. Therefore, the arguments of the learned Counsel for the Plaintiff that he is not competent to speak about the disputed facts in this case is rejected since he is the Assistant Manager(Legal).
40. In the light of the above discussions, point for consideration is answered in favour of the Plaintiff and against the Defendants. The Judgment of the learned III Additional Judge, City Civil Court, Chennai in O.S.No.14299 of 2010 dated 11.10.2012 is perverse and is to be set aside.
In the result, this Appeal Suit is allowed. The judgment of the learned III Additional City Civil Court, Chennai in O.S.No.14299/2010 is set aside. 48/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 The suit is decreed as prayed for with cost throughout.
03.06.2025 Shl/dh Index: Yes/No Internet: Yes/No Speaking Order/Non-speaking Order To
1. The III Additional City Civil Court, Chennai SATHI KUMAR SUKUMARA KURUP, J.
shl/dh 49/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm ) A.S.No.531 of 2013 Judgment made in A.S.No.531 of 2013 03.06.2025 50/50 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/07/2025 07:50:31 pm )