Delhi District Court
M/S Panalpina World Transport (India) ... vs M/S Dhruv Industries Ltd on 21 January, 2019
IN THE COURT OF SH. AJAY NAGAR, COMMERCIAL CIVIL
JUDGE-CUM-ADDITIONAL RENT CONTROLLER (WEST),
TIS HAZARI COURTS, DELHI.
CS No. 611263/2016
M/s Panalpina World Transport (India) Pvt. Ltd.
Technopolis
Second Floor, Sector-54,
Golf Course Road,
Gurgaon- 122011. ....Plaintiff
VERSUS
M/s Dhruv Industries Ltd.,
F-4, Udyog Nagar,
Rohtak Road,
Delhi-110041.
Also at:-
Plot No. 17-22,
Sector-34, E.H.T.P.,
Gurgaon -122016. .... Defendant
Date of Filing : 02.06.2009
Date of Judgment : 21.01.2019
JUDGMENT
1. The plaintiff has filed the present suit for recovery of Rs. 81,559/- (Eighty One Thousand Five Hundred and Fifty Nine only) along with pendente lite and future interest @ 24% p.a. with cost in favour of the plaintiff and against the defendant.
2. The version of the plaintiff is that the plaintiff company incorporated under the Companies Act, 1956 having its Registered Office at Akruti Trade Centre, 402, 4th Floor, Road # 7, Marol, MIDC, Near Seepz, Andheri (East), Mumbai 400 093 CS No. 611263/16 M/s Panalpina World Transport(India) Ltd. Vs M/s Dhruv Industries Ltd. Page 1/11 and having its office in the National Capital Region at Technopolis, Second Floor, Sector 54, Golf Course Road, Gurgaon 122011.
That the defendant is a company having its office at F-4, Udyog Nagar, Rohtak Road, Delhi-110041 and its Managing Director, Sh. R.C. Kathuria is in charge and responsible for its day to day affairs.
That the plaintiff herein acting as Foreign Forwarders executed various ocean import shipments of the defendant's consignments and plaintiff raised several invoices but defendant made defaults. After adjusting the payments made by the defendant company towards their services a sum of Rs.50,345/- was still outstanding.
That plaintiff company served a legal notice dated 04.01.2008 on the defendant company. However, the defendant company failed to reply to the said notice.
3. Written Statement was filed by the defendant taking preliminary objection as to territorial jurisdiction. The defendant states that as a matter of practice it is the duty of the freight forwarder to ensure that the code applied to the goods corresponds with the goods that are being exported and also ensure that all the compliances with respect to the said goods have been done.
The defendants allegation is that the plaintiff wrongly classified the goods as hazardous and dangerous, due to which the IMCO code became applicable. IMCO code is applicable only to those goods which are "Miscellaneous Dangerous Substances and Articles". Further, where the goods are CS No. 611263/16 M/s Panalpina World Transport(India) Ltd. Vs M/s Dhruv Industries Ltd. Page 2/11 classified under the IMCO code, they require extra precaution in terms of handling and transporting the same and have special containers for it. The two main consequences which emerge under such circumstances, in dealing with hazardous goods, are more transportation costs and delayed delivery on account of longer procedure. Details of the IMCO code guidelines have been filed with the written statement.
That plaintiff was negligent in allowing the mentioning of "IMCO 9" code (which was otherwise not applicable) to the goods of the defendant company whereupon the defendant had to face the consequences of excess freight charges and delayed delivery.
That due to acts of the plaintiff company, the defendant has faced huge losses. On account of which the plaintiff company is liable to pay money to the defendant.
The defendant also states that defendant company has encumbered financial losses in the form of business losses by loosing its existing (NUCON) as well as the prospective customers on account of omission and commission of acts by the plaintiff company. It is further stated that the defendant company had done only two consignments with the plaintiff company and in both the cases the defendant company had to unreasonably bear the cost of IMCO code, as both the times the plaintiff company had negligently allowed the goods to be transported with "IMCO 9" code, whereupon the defendant company had to bear the excessive cost of transportation and also the delay in delivery (leading to loss of important clients namely "NUCON") which is directly attributable to the plaintiff company. The defendant denied receipt of legal notice at all.
CS No. 611263/16 M/s Panalpina World Transport(India) Ltd. Vs M/s Dhruv Industries Ltd. Page 3/114. Thereafter, the plaintiff filed the replication reiterating and reasserting the facts as stated in the present suit.
5. Thereafter on the basis of the pleadings of the parties, following issues were framed:-
(i). Whether the court has territorial jurisdiction to entertain the present suit?(OPP)
(ii). Whether the suit is without cause of action?
(OPD)
(iii). Whether the plaintiff is entitled for the recovery of the suit amount, as prayed? (OPP)
(iv). Whether the plaintiff is entitled for the interest on the suit amount? if so, at what rate and for which period? (OPP)
(v). Relief.
6. Thereafter, evidence was led on behalf of both the parties.
7. I have heard the arguments at length advanced by Ld. Counsels for the plaintiff as well as defendant and gone through the record very carefully.
8. The issue-wise findings are as under:-
(i). Whether the court has territorial jurisdiction to entertain the present suit?(OPP)
9. The plaintiff in his plaint has stated that the cause of action arose in Delhi as the meetings between the CS No. 611263/16 M/s Panalpina World Transport(India) Ltd. Vs M/s Dhruv Industries Ltd. Page 4/11 representatives of parties took place in Delhi. On the contrary, in his W.S., the defendant objected to the territorial jurisdiction of this court on the basis that the entire transaction between the plaintiff company and the defendant took place in Gurgaon Plot No.17-22, EHTP, Sector-34, Gurgaon, Haryana and not from Delhi. He states that in fact the defendant office at Delhi does not deal in any business transaction and the same was done in this case. The burden to prove that there is no territorial jurisdiction of this court lies on the defendant who has not produced any documents in its favour, exceptly a mere statement in its W.S. Section 20 CPC talks about "other suits to be instituted where defendant resides or cause of action arises". In the explanation to Section 20 CPC, it has been clarified that a corporation shall be deemed to carry on business at its sole or principal office in India or in respect of any cause of action arising at any place where it also has a subordinate office at such place. The defendant's board resolution which is Ex.DW1/1 clearly shows its registered office at F-4, Udyog Nagar, Rohtak Road, Delhi-110041. In the absence of any evidence to the contrary, this court is satisfied that the cause of action arose in Delhi and for the purposes of this suit, the defendant can safely be said to be residing or carrying on business in New Delhi.
In view of the reasoning given above, issue no.1 is decided against the defendant and in favour of the plaintiff.
(ii). Whether the suit is without cause of action?
(OPD)
10. This suit for a decree of recovery of money has been filed by the plaintiff arising from a contract between the parties CS No. 611263/16 M/s Panalpina World Transport(India) Ltd. Vs M/s Dhruv Industries Ltd. Page 5/11 wherein the plaintiff acted as freight-forwarder for the defendant. The plaintiff executed various import shipments of the defendant consignments for which they raised invoices for their services towards sea or freight and other charges. The defendant has admittedly defaulted in making due and complete payment against the rest invoices.
The case of the defendant is that the plaintiff negligently classified their goods as hazardous or dangerous due to which the IMCO 9 code became applicable to them and, therefore, goods got classified under dangerous and hazardous articles. Such goods require extra precaution in respect of handling and transporting. Resultantly, the goods gets delay in delivery and have more transportation costs. The defendant has also claimed that they lost their client due to the negligence of the plaintiff. In order to decide whether the cause of action between the parties has arisen or not, the subject matter of dispute needs to be considered. In the matter in hand, there is sufficient cause of action in as much as the plaintiffs professional fee has been withheld by the defendant on account of allegation of negligence. Such an issue requires a trial and weighing evidence from both the sides.
Thus, issue no.2 is decided in favour of the plaintiff and against the defendant.
(iii). Whether the plaintiff is entitled for the recovery of the suit amount, as prayed? (OPP)
11. The main question to be answered in this suit is whether the plaintiff was negligent in classifying the goods of the defendant company under the IMCO 9 code due to which CS No. 611263/16 M/s Panalpina World Transport(India) Ltd. Vs M/s Dhruv Industries Ltd. Page 6/11 defendant suffered losses and delayed delivery of its goods. The plaintiff has exhibited original freight invoices Ex.PW1/4 (colly). According to the plaintiff's version Rs. 50,345/- remains unpaid by defendant. Defendant has not disputed the fact of non-payment but has instead set up a defence of negligence on part of plaintiff, being freight-forwarders on account of which defendant had to pay excess charges for delivery of its goods to buyer. It is not disputed by either party that defendant deals in the business of exporting 'Electronic Capacitor Goods Metalized Polypropylene Film' and engaged plaintiff as its freight-forwarder for certain shipments. It is further undisputed that petitioner classified the said goods under 'hazardous/dangerous goods' category due to which IMCO 9 code became applicable. The petitioner has not led any evidence on how it classified defendant's goods under 'hazardous/dangerous goods'. Ld. Counsel for the defendant has exhibited copies of quotation dated 22.08.2006 and 05.07.2006 (Ex.DW1/3 and Ex.DW1/4) wherein the plaintiff has itself written 'NA' under dangerous goods category for defendant's goods. In addition, the defendant has placed on record Approval Certificate by Capital Pest Control (India) Ex.DW1/6 which clearly shows that even the packaging material for defendant's goods (wooden pallets) post fumigation is free from injurious insects and pests and 'not harmful to health'. Moreover, defendant has also placed on record its bill of loading issued by another freight forwarder , Schenker Ocean (Ex.DW1/11) wherein goods have not been classified as dangerous and have still seamlessly reached the desired destination. Thus, the preponderance of probabilities suggests that defendants goods were wrongly marked as CS No. 611263/16 M/s Panalpina World Transport(India) Ltd. Vs M/s Dhruv Industries Ltd. Page 7/11 'dangerous/hazardous' by petitioner.
However, the question that comes up for consideration is whether the plaintiff owed such duty of care and responsibility over marking of defendants good which can be said to have been breached. There is no doubt that plaintiff was engaged as 'freight-forwarder' by defendant. DW1 in his affidavit has stated that as a matter of practice, it was duty of 'freight-forwarder' to ensure that code applied to the goods corresponds with the goods that are being dispatched and also ensure all compliances are thereby, fulfilled. Therefore, it seems that it was, in fact, plaintiff's duty as a professional freight forwarder to ensure that its customers goods were categorized correctly. As such, plaintiff seems to have not performed its duty properly.
12. Ld. Counsel for the plaintiff has argued that defendant was aware of its goods being subject to IMLO 9 code. Per contra, Ld. Counsel for defendant vehemently denied the same and placed on record Ex.DW1/10 which is an e-mail exchanged between defendant and plaintiff wherein defendant specifically stated they had informed plaintiff prior to shipping of goods not to mention IMCO 9 code on shipping documents. Plaintiff has not placed on record anything to show why or how they classified defendant's goods under IMCO 9 code. No sufficient explanation with regard to practice of trade or some reliable endorsement has been produced in evidence by plaintiff. Moreover, in cross-examination of PW1, he states that he is not aware as to under which code/law such classification was done. Thus, plaintiff has not discharged its burden of proof sufficiently.
CS No. 611263/16 M/s Panalpina World Transport(India) Ltd. Vs M/s Dhruv Industries Ltd. Page 8/1113. It is stated by defendant that on account of negligence on the part of petitioner, they paid excess freight to the tune of Rs.69,303/-. In support of this contention, defendant has placed on record Ex.DW1/7 which is an invoice raised by Transmare Logistics towards IMCO field rent which is a consequence of goods being classified under IMCO 9. Defendant has also placed on record an invoice (Ex.DW1/8) raised between defendant and the buyer company. It mentioned "less; 2. Reimbursement as per our understanding" which is stated by defendant to be excess charges being reimbursed to the buyer due to application of IMCO 9 code by plaintiff. Ld. Counsel for the plaintiff argues that Ex.DW1/7 which states charges towards field rent are charges incurred for storage of goods. However, the Ld. Counsel for defendant contends that when IMCO 9 code becomes applicable on goods, they are stored for a much higher number of days and the cost of storing such 'hazardous/dangerous' goods is also much higher than normal cargo. This argument of defendant is also substantiated by Ex.DW1/12 which bears e-mails exchanged between defendant's buyer and defendant wherein the buyer is repeatedly questioning defendant as to who shall bear excess charges incurred on cargo due to application of IMCO 9 code. Thus, this court is of the opinion that defendant has, in fact, paid excess charges on the cargo due to classification under the said code.
14. Now, the question to be considered is whether the charges paid/wrongful loss caused to defendant was a direct and foreseeable consequence of the negligence of plaintiff.
CS No. 611263/16 M/s Panalpina World Transport(India) Ltd. Vs M/s Dhruv Industries Ltd. Page 9/11Also, whether plaintiff owed a duty of care towards defendant to make proper classification of cargo. It is settled law that party can not be held accountable for a consequence arising from its action which could not be reasonably foreseen as a matter of logic/practice of trade. In the matter at hand, plaintiff being a freight forwarder was directly responsible for ensuring correct classification of defendant's goods as part of its duties as a professional. Moreover, being in the profession, it can safely be assumed that plaintiff would have been aware of the higher charges applicable for transport/storage of goods classified as hazardous/dangerous. Thus, the excess charges borne by the defendant is a direct and wrongful loss caused to defendant on account of negligence on the part of plaintiff.
Ld. Counsel for plaintiff also argues that the delivery of the cargo was not delayed even for a day and has relied upon Ex.DW1/12 which contains a mail from defendant to its buyer stating the same. Ld. Counsel for defendant argues that the shipment was in fact delayed and that the contents of the mail are merely to save face by defendant before its buyers. This court can not accept defendant's contention as it is unsubstantiated by any material evidence. Thus, the allegation of delayed delivery is not proved against plaintiff.
15. In view of the above discussion, in the opinion of this court equity dictates that one should not have to pay for wrongful loss caused to him due to negligence of another. Thus, defendant already having paid excess charges more than the amount due to plaintiff on account of plaintiff's negligence, this court holds that plaintiff is not entitled to recover the amount due from CS No. 611263/16 M/s Panalpina World Transport(India) Ltd. Vs M/s Dhruv Industries Ltd. Page 10/11 defendant. Thus, this issue is decided in favour of defendant and against the plaintiff.
(iv). Whether the plaintiff is entitled for the interest on the suit amount? if so, at what rate and for which period?(OPP)
16. As a consequence of Issue no. 3 being decided in negative. This issue is also decided against the plaintiff and in favour of defendant.
(v). Relief:-
17. In view of aforesaid discussion, this court holds that plaintiff is not entitled to recover amount due and interest thereon from defendant. Costs to be borne by parties.
18. Suit is dismissed.
19. Decree sheet be prepared accordingly.
20. File be consigned to Record Room.
Announced in the open court
on 21st January, 2019. Digitally signed
AJAY by AJAY NAGAR
(This judgment contains 11 pages) NAGAR Date: 2019.01.21
16:05:06 +0530
(AJAY NAGAR)
Commercial Civil Judge-cum-
Additional Rent Controller (West)
Delhi.
CS No. 611263/16 M/s Panalpina World Transport(India) Ltd. Vs M/s Dhruv Industries Ltd. Page 11/11