Delhi District Court
Hindustan Sanitaryware Ltd. vs . Odyssey International & Ors. on 31 March, 2017
CS No.320/16/2004
Hindustan Sanitaryware Ltd. vs. Odyssey International & Ors.
IN THE COURT OF SHRI SHAILENDER MALIK
ADDITIONAL DISTRICT JUDGE03: CENTRAL: DELHI
CS No.320/16/2004
New No. 9888/16
In the matter of
M/s. Hindustan Sanitaryware Ltd.
Having its registered office at 2, Red Cross Place,
Kolkata - 700 001.
And its Marketing and Export Office at:
Tiwari House, Second Floor,
11B/8, Main Pusa Road,
New Delhi110005 (India)
Through its Authorized Representative. ...Plaintiff.
Versus
1. M/s. Odyssey International
P.O. Box No. 1696,
Hilcrest3650, 22, Henwood Road,
Pinetown, Durban, Republic of South Africa
Service to be effected through
Mr. Mare Turk its Proprietor/ Partner / Director
2. M/s. Aero Aqua International Freight Forwarders,
Maxprop House, 98, Bulwer Road, Durban4001,
Republic of South Africa,
Service to be effected through
Gill Wilkie and / or Averille Roberts.
Suit partly decreed. 1/18
CS No.320/16/2004
Hindustan Sanitaryware Ltd. vs. Odyssey International & Ors.
3. M/s. 20 CUBE Logistics Private Limited.
(Formerly known as OMEGA GLOBAL LOGISTICS
PRIVATE LIMITED.)
First Floor, MM Towers, Plot No. 8 & 9,
Udyog Vihar Phase4, Gurgaon122 016 .... Defendants
Date of institution of suit : 28.02.2004
Date of hearing final argument : 22.03.2017
Date of Judgment : 31.03.2017
Suit for Recovery of Damages of Rs. US$27819.00 along with
Pendentlite and Future Interest.
JUDGMENT
1. This is a suit for recovery of US $ 27819.00 with pendentlite and future interest.
2 Plaintiff is a registered company under Companies Act. Plaintiff company was earlier known as Hindustan Twyfords Ltd. Upon change of its name, plaintiff company runs its business by captioned name. Plaintiff company is stated to be leading manufacturer, exporter in the arena of sanitaryware and is engaged in world class production of sanitaryware items. Plaintiff company Suit partly decreed. 2/18 CS No.320/16/2004 Hindustan Sanitaryware Ltd. vs. Odyssey International & Ors.
is having its registered office in Kolkata and having one of its marketing and export office at Tiwari House, Pusa Road New Delhi. Present suit on behalf of plaintiff company was filed by Sh. A.K. Mohanty, its General Manager (Personnel) who has been duly authorized by it to represent by virtue of Board Resolution dt 10.10.99.
3 Defendant no. 1 is a company / firm of Durban, Republic of South Africa being run by one Mr. Mark Turk (Proprietor / Partner). Defendant no. 1 is stated to be buyer of products of plaintiff company and has been buying and importing various products of plaintiff company such as low level pan, washbasin, pedestrail and EWC + sistern, since year 19992000. It is stated that on specific request and orders of defendant no. 1, plaintiff company had developed specific product as per his specifications and product standards of South African Market. Commercial transaction / shipment with defendant had started since the end of 1999.
4 It is stated that in year 2001, upon orders from defendant no. 1, placed at marketing and export office of plaintiff's company at Delhi, plaintiff company arranged export of ceramics sanitaryware vide (i) Invoice no. HIS/HY /RSF/055/20012002 for CWC Suit partly decreed. 3/18 CS No.320/16/2004 Hindustan Sanitaryware Ltd. vs. Odyssey International & Ors.
horizontal P(Low Level Pan) (Pearl Colour) (625 P Kgs) @ US $ 4.5 per piece totaling to FOB value of US$ 2812.50, (ii) Invoice no. HIS/HY /RSF/052/20012002 and (iii) Invoice no. HIS/HY /RSF/056/20012002 for washbasin radiant drop, 50 pieces @ US$ 1.5 totaling to US $ 575, washbasin Prinsten 18 pieces @ of US $ 5 totaling US $ 590, Pedestiral Princeten 118 pieces @ US$5 total US $ 590 , EWC Princeton PTRAP 18 pieces @ US $ 13.5 amounting to U$ 1593, Sistern Princeton 118 pieces @ US$ 7 totaling to FOB value of US $ 826. The total value of these two invoices comes out to be US$ 8348. (iv)Vide Invoice no. HIS/HY /RSF/058/20012002 dt 27.08.2001 and defendant no. 1 order no. BECK 02112000/9, supplied washbasin, radiant drop 50 pieces @ US $ 11.5 amounting to US $ 575, washbasin Princeton 118 pieces @ US $ 5 amounting to US $ 590, pedestrial Princeton 118 pieces @ US $ 5 amounting to US $ 590, EWC Princeton PTRAP 118 pieces @ US $ 13.5 amounting to US$ 1593, Sistern Princeton 118 pieces @ US $ 7 amounting to US $ 826 total amounting to FOB value of US $ 4174. (v) vide Invoice no. HSI/HY /RSF/061/20012002 dt 30.08.2000 and in response to buyers order no. BECK 0211 2000/9 and 10, plaintiff supplied washbasin radiant drop 50 pieces @ US$ 11.5 amounting to US $ 575, EWC Princeton PTRAP 116 pieces @ US $ 13.5 totaling to US $ 15.66, Sistern Princeton 116 pieces @ Suit partly decreed. 4/18 CS No.320/16/2004 Hindustan Sanitaryware Ltd. vs. Odyssey International & Ors.
US $ 7 amounting to US $ 812, washbasin Princeton 116 pieces @ US $ 5 amounting to US $ 580, pedestrial Princeton 116 pieces @ of US $ 5 amounting to US $ 580. The total FOB value of this invoice was US $ 4113.
5. It is mentioned in the plaint that defendant no. 2 is freight forwarder, appointed by defendant no. 1 who as per the instructions of defendant no. 1 used to undertake and organize arrangement of importation and consignment in Republic of South Africa. Defendant no. 2 inter alia is / was having business arrangements with defendant no. 3 in India. As such in nutshell defendant no. 3 stated to be authorized freight forwarder of defendant no. 1 through defendant no. 2. Defendant no. 3 used to undertake and organize exportation of shipment of consignment from India to Republic of South Africa for defendant no. 1. It is stated that delivery of consignment pertaining to above mentioned invoices was on FOB (Free on Board) basis. As per the practice and international business trend, plaintiff company got allotted consignments formation invoices in containers, provided by defendant no. 1 through defendant no. 2 & 3 at Mumbai. Defendant no 2 issued BL / MTD no. DELC/0000705, 0000701, 0000703 and 0000717. The said Multi Modal Transport Bill of Lading (MTD) depict Suit partly decreed. 5/18 CS No.320/16/2004 Hindustan Sanitaryware Ltd. vs. Odyssey International & Ors.
plaintiff company's marketing and export office at Delhi as consignor and consignee has been depicted as "to the orders of the Standard Bank, Hill Crescent, South Africa". Further, said document depict individual address of defendant no. 1. These MTDs Bill of Lading were duly issued by defendant no. 3 at Delhi. Defendant no. 3 accepted the consignment at ICD Hyderabad and the Port of Lading was NSICT. Port of discharge and place of delivery were depicted in those MTDs as Durban. In these MTDs, defendant no. 2 has been depicted as delivery agent.
6. It is mentioned that since as per normal practice for every consignment, freight amount was payable at destination. Accordingly, each of three numbers of MTDs were prepared and issued by defendant no. 3 from its office at New Delhi and delivered to plaintiff company. As per the requirement of international business and trade, plaintiff company obtained certificate of origin duly issued by PHD Chambers of Commerce and Industry, New Delhi wherein it was duly certified that goods mentioned in the above referred invoices are of Indian Origin. It is mentioned that after handing over the goods to defendant no. 3, on behalf of defendant no. 1 qua defendant no. 2, plaintiff company also handed over complete set of document including invoices, packing list, Suit partly decreed. 6/18 CS No.320/16/2004 Hindustan Sanitaryware Ltd. vs. Odyssey International & Ors.
MTDs , certificate of origin to its banker i.e. Central Bank of India, Parliament Street New Delhi, for presentation to Standard Corporate Merchant Bank, International Business Centre, Durban.
7. Plaintiff company relies upon letters dt. 01.09.2001, 06.09.2001, 06.09.2001 and 13.09.2001 addressed to Manager, Central Bank of India Parliament Street, New Delhi. It is stated that in these letters, plaintiff company specifically informed regarding shipment made to defendant no. 1 and further requested for sending of documents on CAD (Cash Against Documents) basis and further forwarded the set of documents through courier. It is mentioned in the plaint that information as received to the plaintiff company from its banker Central Bank of India, all forwarded documents in relation to shipments of goods in question were duly sent in normal course of business to Standard Corporate and Merchant Bank for onward presentation to defendant no. 1 through Courier. Since as per international trade and business norms, defendant no. 1 was required to pay complete amount as agreed upon between plaintiff and defendant no. 1 upon presentation of document with Standard Corporate and Merchant Bank of Durban, for Central bank of India, India, on behalf of plaintiff company. Upon such payment, all the original documents including MTDs should be presented to Suit partly decreed. 7/18 CS No.320/16/2004 Hindustan Sanitaryware Ltd. vs. Odyssey International & Ors.
defendant no. 2 at the port of discharge at Durban for receiving the goods in question from shipping line. In the earlier dealing with defendant no. 1, same practice was adopted. Plaintiff company used to send shipment through agent of defendant no. 1 and in normal course used to present documents to its banker in India, for presenting the same to the banker of defendant no. 1 at Durban. Defendant no. 1 would then made payment to its banker and used to collect all the original documents including MTDs through its freight agent and freight agent used to present the same to shipping line and to get the goods released.
8. It is alleged that in the present case, defendant no. 1 neither paid the dues of shipment / goods i.e. US $ 19447 to Standard Corporate and Merchant Bank Durban, nor defendant no. 1 collected the original documents including MTDs Bill of Lading lying with the said bank. Whereas, plaintiff company has learnt that shipments of goods in question had arrived at Durban (Port of discharge). But, despite repeated request freight of shipment of goods was not disclosed by defendant no. 2 & 3. Officials of plaintiff company kept on making inquiries from the officials/ representative of defendant no. 3 at New Delhi and with officials of defendant no. 2, on telephone, by email. They, however, kept on Suit partly decreed. 8/18 CS No.320/16/2004 Hindustan Sanitaryware Ltd. vs. Odyssey International & Ors.
avoiding the issue on one pretext to other. Officials of plaintiff company in Dec. 2001 came to know that shipment of goods under the above said invoices, sent in five containers have been released to defendant no. 1 by active connivance with each other with defendant no. 2 and 3, without making any payment to Standard Corporate and Merchant Bank and without original Bills of Lading.
9. It is further mentioned in the plaint that plaintiff company then started following the matter with all the defendants, particularly with officials of defendant no. 3 as goods were handed over to them in India. It was their duty to release the goods at the order of Standard Corporate and Merchant Bank to the persons authorized, after obtaining the original bill of lading and making sure that dues in respect of goods to be released have been paid by such persons. Officials of plaintiff company also called upon the officers of defendant no. 2 on telephone and email for sorting out the dispute. It is alleged that defendant no. 2 & 3 being in collusion with defendant no. 1 kept on delaying the matter on one pretext or other without any concrete efforts. It is alleged that different calls and emails sent from plaintiff remained unresponded. Plaintiff company having left with no other way, faxed a letter dt 21.06.2002 to South African High Commission at New Delhi for referring the Suit partly decreed. 9/18 CS No.320/16/2004 Hindustan Sanitaryware Ltd. vs. Odyssey International & Ors.
matter for remedies and recovery of amount from defendant no. 1. It is alleged that all the defendants in connivance with each other kept on assuring plaintiff company that dispute will be settled and payment will be made to Standard Corporate and Merchant Bank. However, same was not done. Ultimately Standard Corporate and Merchant Bank vide its letter dt 09.07.2002 to Central Bank of India New Delhi returned the documents sent to it on account of defendant no. 1 with endorsement that Drawee has advised that they will not be effecting payment. Central Bank of India by its letter dt. 24.01.2003 informed the return of documents. Hence, the present suit was filed seeking recovery of sum of US $ 27819 with pendentlite and future interest @ 18 %. It is further prayed that defendant may be directed to pay the above said amount in Indian Rupees as per prevalent rate.
10. After institution of the suit defendant no. 1 & 2 failed to put appearance despite being served with the summons and thus were proceeded exparte on 30.05.2005.
11. Defendant no. 3 appeared and filed the WS taking the plea therein that suit of the plaintiff is neither maintainable nor sustainable. While taking the plea that since there was a arbitration Suit partly decreed. 10/18 CS No.320/16/2004 Hindustan Sanitaryware Ltd. vs. Odyssey International & Ors.
clause in clause 26 of Bill of Lading, the present claim of the plaintiff company is not maintainable qua defendant no. 3. It is further pleaded that plaintiff has no locus to file the suit so far as against defendant no. 3 since defendant no. 2 was the freight forwarder appointed by defendant no. 1. Since defendant no. 2 as per the instructions received from defendant no. 1, used to undertake and organized arrangements for importation. Defendant no. 3 who was simply having business arrangement with defendant no. 2, therefore cannot be made liable for the amount claimed in the present suit. Defendant no. 3 was not liable in any manner for the fate of the consignment once it is properly and duly shipped. It is stated that suit is devoid of cause of action and the court at Delhi has no territorial jurisdiction as admittedly place of acceptance of consignment was Hyderabad and Port of Loading is Mumbai, place of Delivery is at Durban. It is further stated that present suit is bad for misjoinder of parties.
12. While not disputing those facts which are matter of record, and not pertaining to defendant no. 3, rest of the case of the plaintiff has been denied. It is specifically denied that defendant no. 3 has in any manner acted in connivance with defendant no. 1 and 2 for release of shipment without payment and delivery of documents. It Suit partly decreed. 11/18 CS No.320/16/2004 Hindustan Sanitaryware Ltd. vs. Odyssey International & Ors.
is pleaded that defendant no. 3 had no physical control over the consignment at the Port of Discharge. Therefore, defendant no. 3 being a freight forwarder whose job was restricted to ship the consignment, cannot be made liable for the amount as claimed. It is further pleaded that officials of plaintiff company never contacted with defendant no. 3. Even otherwise the task of defendant no. 3 was limited to the extent of shipping the consignment.
13. Plaintiff company filed the replication wherein case of the plaintiff was reiterated.
14 It appears from the record that on behalf of defendant no. 3 an application was moved under section 5 of Arbitration Act, for referring the dispute to the arbitrator. Said application, however, was dismissed by predecessor of this court vide order dt. 25.04.2006.
15. On the basis of pleadings as come on the record, Ld. Predecessor of this court framed the following issues on 10.12.2008:
1. Whether the plaintiff has locus standi to file the present suit against the defendant no. 3? OPP Suit partly decreed. 12/18 CS No.320/16/2004 Hindustan Sanitaryware Ltd. vs. Odyssey International & Ors.
2. Whether the suit of the plaintiff is liable to be dismissed for mis joinder and non joinder of the parties? OPD
3. Whether the plaintiff is entitled to sum of Rs. US$ 27819 along with future interest @ 18% pa? OPP
4. Relief.
16. In order to substantiate its case, plaintiff company has examined one witness PW1 A.K. Mohanty. No witness was examined on behalf defendant no. 3 despite opportunities.
17. I have heard counsels for the parties and have gone through the record carefully. My findings on each of the issues are as follow: 18. ISSUE NO. 1 & 2 (Whether the plaintiff has locus standi to file the present suit against the defendant no. 3?) & (Whether the suit of the plaintiff is liable to be dismissed for mis joinder and non joinder of the parties? ) Suit partly decreed. 13/18 CS No.320/16/2004 Hindustan Sanitaryware Ltd. vs. Odyssey International & Ors.
19. These issues apparently were framed on the specific plea taken by defendant no. 3 in written statement that suit is devoid of cause of action qua defendant no. 3 and bad for misjoinder of it. Defendant no. 3 has denied its liability for the amount claimed in the present suit simply on the ground that defendant no. 3 had a limited job to ship the consignment being in business arrangements with defendant no. 2, who was freight forwarder of defendant no. 1 company. In the entire plaint, it is specifically pleaded by plaintiff company that defendant no. 2 was the freight forwarder of defendant no. 1. Defendant no. 2 on the instructions to defendant no. 1 used to undertake and organize arrangements of importation and consignments to Republic of South Africa. Defendant no. 3 was only in business arrangement of defendant no. 2 and was authorized to complete the shipment and comply with other formalities. If such was the case of the plaintiff company itself and there being no document coming on the record to show that defendant no. 3 had in any manner active participation in release of consignment at port of discharge i.e. Durban.
20. In this regard, it is important to refer the evidence of PW1 A. K. Mohanty. In the evidence, PW1 though witness has testified about all the transactions and recollection and preparing of Suit partly decreed. 14/18 CS No.320/16/2004 Hindustan Sanitaryware Ltd. vs. Odyssey International & Ors.
documents etc. but so far as regarding liability of defendant no. 3 PW1 has admitted in his cross examination that job of freight forwarder is limited to documentation for affecting the shipment. PW1 though has testified that there was a written agreement between the plaintiff company and defendant no. 3, however, such deposition is apparently beyond the record as there was never any such written agreement with defendant no. 3 nor same was ever placed on record.
21. On meaningful reading of averments of the plaint as well as the evidence as come on record, one cannot by any stretch of imagination, attribute the liability in the present suit so far as against defendant no. 3. there has never been any privity of contract between plaintiff company and defendant no. 3. ld. Counsel for the defendant no. 3 has rightly drawn my attention to different correspondence and emails sent from plaintiff company to defendant no. 1 and 2, clearly showing that essentially the contract regarding supply of sanitary ware products was between plaintiff company and defendant no. 1 and defendant no. 2 was its freight forwarder. Defendant no. 3 has nothing to do with regard to contract of sale of product of plaintiff to defendant no. 1. there is sufficient evidence on record to show that defendant no. 3 was only acting as Suit partly decreed. 15/18 CS No.320/16/2004 Hindustan Sanitaryware Ltd. vs. Odyssey International & Ors.
agent of defendant no. 2. job of defendant no. 3 was confined only to complete the formalities regarding shipment to be consigned to South Africa. Therefore, I find that in the facts of the present case, defendant no. 3 at least has no liability regarding the amount claimed in the present suit. Plaintiff therefore, held to be having no locus or cause of action to file the present suit against defendant no.
3. Issue no. 1 & 2 thus stand decided against plaintiff.
22. ISSUE NO. 3(Whether the plaintiff is entitled to sum of Rs. US$ 27819 along with future interest @ 18% pa? )
23. This court had already held that suit so far as against defendant no. 3 is not sustainable. Having so held, I however find that plaintiff company has been able to establish its case as against defendant no. 1 and 2. firstly these defendants have not contested the suit and remained exparte. Moreover, there is unimpeachable evidence of PW1 on the record establishing supply of different products under invoices Ex.PW1/4 to PW1/7. Packing list of which is Ex.PW1/8 to PW1/11 as well invoices Ex.PW1/12 and Ex.PW1/13. MTDs Bill of Lading Ex.PW1/14 to PW1/17 also established that goods were sent to defendant no. 1 at Durban. Its Suit partly decreed. 16/18 CS No.320/16/2004 Hindustan Sanitaryware Ltd. vs. Odyssey International & Ors.
name is very much mentioned in the Bill of Lading. Letters Ex.PW1/19 to 22 also establishes the fact the complete amount as agreed upon plaintiff and defendant no. 1, in terms of invoices raised was to be paid to Standard Corporate and Merchant Bank of Durban and upon such payment, original documents including MTDs were required to be presented by defendant no. 2 at the port of discharge i.e. Durban. However, all these formalities were not complied with and defendant no. 1 & 2 in connivance with each other fraudulently got the goods released without presenting the original documents and making the payment thereof. In view of such unrebutted evidence coming on the record I find that suit of the plaintiff is very much established against defendant no. 1 & 2 who are jointly liable for the payment of amount claimed. Plaintiff is also entitled for pendentlite and future interest on the amount claimed @12 % pa against defendant no. 1 & 2. issue accordingly decided in favour of plaintiff and against defendant no. 1 & 2 only.
24. RELIEF In view of my findings on the above said issues, suit of the plaintiff partly decreed for sum of US $ 27819 (or equivalent amount in Indian Currency as per current rate) as against Suit partly decreed. 17/18 CS No.320/16/2004 Hindustan Sanitaryware Ltd. vs. Odyssey International & Ors.
defendant no. 1 and 2 only with pendentlite and future interest @12% pa. Suit however, stands dismissed so far as defendant no.
3. Decree sheet be accordingly prepared. File be consigned to record room after due compliance.
Today: 31.03.2017.
Announced in the open court (SHAILENDER MALIK) ADJ3 (CENTRAL) TIS HAZARI COURTS DELHI Suit partly decreed. 18/18