Delhi District Court
M/S Aquatic Freights Pvt. Ltd vs M/S Rajnish International on 29 November, 2007
1
IN THE COURT OF MS. ASHA MENON, ADJ,
TIS HAZARI, DELHI.
RCA No. :17/06
M/S AQUATIC FREIGHTS PVT. LTD. ....APPELLANT
J- 31, (LGF) SAKET
NEW DELHI-110017
VS.
M/S RAJNISH INTERNATIONAL ....RESPONDENT
E- 26 PHASE LV FOCAL POINT
LUDHIANA 141010
ORDER
This order will dispose of the first appeal preferred by Aquatic Freights P. Ltd. who was the plaintiff before the Ld. Trial Court, against the judgment and decree of the Ld. Trail Court dated 02.08.06.
The brief facts as set out in the plaint are that M/s Aquatic Freights P. Ltd. filed a suit for recovery of Rs. 15,433/- against M/s Rajnish International for services rendered to the defendant in respect of consignments handled by the plaintiff/appellant. It was submitted in the plaint that the plaintiff was engaged as clearing and forwarding agents for clearance and import and export of cargo from the customs department and other related matters and was an incorporated company. It was submitted that the plaintiff held 2 a license as Customs House Agents granted to it by the Collector of Customs, New Delhi. It was submitted that in the course of business plaintiff/appellant had handled export of automotive spare parts as described in the plaint to foreign countries under instructions of the defendant/respondent against various bills, however the defendant had not paid the amount due to the plaintiff/appellant for services rendered to them in respect of the consignments. The total amount was Rs. 15,433 which despite several requests remained due and payable by the defendant/respondent. Legal notice was issued but the claim was refuted by the defendant/respondent vide its reply dated 27.12.03 contending that due to negligence of the plaintiff/appellant the defendant/respondent had suffered a loss of USD 12008. The plaintiff/appellant sent further reply notice dated 24.01.04 rebutting these false allegations and informing the defendant/respondent that as clearing and forwarding agents the liability of the plaintiff was limited to the clearing of cargo from the customs and handing over the same in as good a condition as received from the defendant to the carrier that is the shipping line. According to the plaintiff/appellant they had discharged the legal obligations as customs agents and were entitled to Rs. 15,433/- towards their services. It was also informed to the defendant/respondent 3 vide letter dated 24.01.04 that any damage to the cargo was to be settled with the carrier that is the shipping line whose bill of lading they were holding. Since no payments had been received the suit was filed.
In the written statement the defendant raised many preliminary objections including that the private limited company had no authority to institute the suit and that the plaintiff had approached the Court suppressing material facts. It has been stated that the parties had dealings since long and a running account was maintained and no statement of account had been furnished to show the amounts received by the plaintiff from the defendant towards freight charges. It was claimed in the written statement that the plaintiff/appellant had represented itself to be a Carrier Company and the defendant had been transporting their goods on regular basis through the plaintiff company and that since the defendant had raised a claim for Rs. 8 lakhs the plaintiff had filed the present suit. It was denied that the plaintiffs' business was of clearing and forwarding agents and the defendant alleged that the plaintiff was engaged in the business of transportation of goods from one destination to another through marine routes. It was submitted that since the plaintiff was a carrier company and had undertaken the job of transportation of the 4 goods it was liable for safe landing in good condition at the respective destination and was liable to compensate the defendant for losses sustained. Hence it was prayed that the suit be dismissed.
In the replication the plaintiff reiterated its case also submitting that the Capt. J. S. Ahluwalia was the Managing Director of Aquatic Freights Pvt. Ltd. and has been authorised by the Board of Directors to file the present suit and a copy of the resolution was placed on the record as annexure B. it was denied that the plaintiff had ever acted as a carrier Company or was liable as a Carrier Company to the defendant.
Upon the pleadings of the parties the Ld. Trial Court framed 4 issues including on the verification and institution of the suit, payment of the dues of the plaintiff as claimed by the defendant and to the plaintiffs entitlement to recover interest along with Rs. 15,433/-. The plaintiff examined Sh. Gurcaharan Singh as PW-1 whereas the defendant examined Sh. Rahul Ahuja as DW-1. After considering the evidence on record and the submissions made the Ld. Trial Court vide the impugned judgment and decree answered all the issues against the plaintiff and accordingly dismissed the suit. Aggrieved by this dismissal the plaintiff has filed the present appeal submitting that the Ld. Trial Court had erred in dismissing the suit. It was 5 submitted that it was due to oversight that the Minute Book of the Board Resolution authorizing Capt. J. S. Ahluwalia to sign and verify the plaint and audit report etc. were not filed. It was submitted that there was other evidence to prove that Capt. J. S. Ahluwalia was and is Managing Director of the appellant. It was submitted that the Ld. Trial Court had erred in not appreciating that the plaintiff Company was not a carrier and that the defendant/ respondent had been dealing with the plaintiff as his Custom House Agent for the last many years. It has been submitted in the grounds of the appeal that the Ld. Trial Court had erred in not appreciating the differences in the responsibility and legal obligations of the plaintiff/appellant as a Customs House agent which were limited to clearance of cargo consignments, preparing shipping bills, getting them registered and generated by customs, getting the consignment requisition from shipping line and the cargo examined by the customs get the ''export order'' after specifying the customs about the compliance of all rules and regulations and the perfect condition of the export cargo, clear the bills of lading issued by the shipping line (which were the Golden Golf Lines Sea Sky Shipping) authorizing delivery of cargo to consignees in foreign countries. It has been submitted that the plaintiff/appellant had forwarded all relevant documents to the 6 respondent and the consignees had taken delivery of their respective cargo in perfectly good condition at the destination against the bills of lading sent to them by the defendant/respondent.
It has been further submitted in the ground that even if it was to be accepted as correct that some damage had taken place in some consignments, the consignment being entirely separate and independent consignees, such pleas which were false and frivolous could not be brought into the present suit as they have no relevance at all. It has been submitted that the Ld. Trial court did not appreciate the fact that the plaintiff/appellant had never had the physical custody of the export consignments and the consignments had been transported by the respondent itself under customs bond from Ludhiana. It has also been submitted that the Ld. Trial Court had erred in assuming that payment of Rs.15,433/- was covered by bills Ex. PW-1/D1 to D6 similarly on the bold statement of the DW-1.
Thus the plaintiff/appellant has prayed for the setting aside of the impugned judgment and decree and for permission to lead additional evidence.
Notice of the appeal was served upon the respondent and Sh. Vipin Nandwani had appeared for the respondent and 7 had filed his vakalatnama on 09.04.07. However, thereafter none appeared for the respondent. Arguments have been advanced on behalf of the appellant by Sh. A. K. Sambhi, Counsel for the appellant. An application for producing additional evidence is also pending and submissions have been heard on that application as well. None has argued on behalf of the respondents.
Ld. Counsel for the appellant has submitted that the obligation of the plaintiff/ appellant was only to get the goods cleared by customs. Two invoices had been raised which reflected Ocean Liner charges and these had been paid by the plaintiff on behalf of defendant. However, the other invoices were all raised by the plaintiff/appellant on account of its own service charges. It has been submitted that it was the respondents'own responsibility to hand over the goods to the shipping company and at no point of time the appellant had handled the goods. It was submitted that goods were cleared for export only after the customs was satisfied that all formalities had been completed. After such suggestion was recorded the customs authorities issued a certificate to enable the export of goods. It is this that is facilitated by the plaintiff company. Thereafter the bills were generated and the Shipping Company handed over the shipping bills and bills of lading and all these 8 bills were forwarded to the defendant/ respondent who was to make the payments to the plaintiff for the expenditure incurred and services rendered. It has been submitted that the bill of lading was handed over to the respondent by the plaintiff. It was reiterated that if there was any damage then it was the responsibility of the carrier as per bill of lading and the clearing house has no liability. It was however submitted that in any case the defendant/respondent had no proof of such damage. In the circumstances, Ld. Counsel for the appellant has submitted that the Ld. Trial Court had wrongly dismissed the suit. Ld. Counsel has further submitted that the suit had been properly instituted by the Managing Director of the Company Sh. J. S. Ahluwalia and if at all formal proof was required then the appellant be granted that opportunity to lead additional evidence in this regard.
After considering the material on the record, I am of the view that the Ld. Trial Court has misdirected itself in appreciating the privity of contract between the parties and the evidence that has come on the record. The Ld. Trial court has not applied its mind to the question as to whether the plaintiff was a transportation/carrier Company and so liable for the damages as claimed by the defendant. It is essential to remember that it is the defence of the defendant that it was 9 entitled to claim a set off in as much as the goods transported by the plaintiff had been damaged to the tune of Rs. 8 Lakhs. The primary onus of proving a plea is on the person who raises such a plea. In the present case no proof of damage has been produced by the defendant to consider whether the defendant was entitled to a set off as claimed.
From the pleadings of the parties alone it is clear that the parties have been engaged in business for many years. The plaintiff has claimed to be clearing and forwarding agents and the defendant disputes this, claiming that the plaintiff was also a transportation Company. The plaintiff has placed on record the CHA license issued by the office of Collector of Customs, New Delhi, permitting it to act as a Custom House Agent. This license has been issued on 16.02.2000 and has been subsequently renewed up to 21.03.2015. There is nothing produced by the defendant that challenges this license. Thus the primary proof of the scope of its business had been produced by the plaintiff through its license Ex. PW-1/C. The question put to PW-1 regarding appointment by the defendant as its agent seems a superfluous question. The defendant in the written statement admitted having transactions with the plaintiff over a long period of time. Obviously, there were several consignments handled by the 10 plaintiff for the defendant otherwise in the preliminary objection no. 1 in the written statement the defendant would not have claimed that there was a running account between the parties. The question is whether the plaintiff was a carrier company or was handling a customs clearing house. The license answers this question in favour of the plaintiff that it was only a Custom Clearing Agent. Any one could obtain its services for obtaining custom clearance for which purpose the plaintiff had been given a license by the Govt. of India. The defendant has asserted that the plaintiff was a transport company. It was therefore upon the defendant to have produced such evidence it had, to prove that it had engaged the plaintiff as a transporter of its goods. Transport challans etc. would have been available with the defendant in the course of these long dealings with the plaintiff to prove these facts that the plaintiff was a transporter. However, no such document has been produced. In the face of the fact that the plaintiff has produced its license as a custom clearing agent and the defendant having failed to establish its claim that it had used the services of the plaintiff as a transporter the only finding that can be returned is that the plaintiff is a Custom Clearing House and its responsibilities are therefore different and distinct from that of a carrier or a transporter. The insistence of the 11 defendant that plaintiff was a transporter stems from its eagerness to claim damages from the plaintiff for some loss it had suffered in respect of some consignment.
By the own admission of DW-1, the defendants had received the bills of lading ex. PW-1/K1, K2 and K3. In all these bills of lading relating to the transaction the shipper is the defendant and the shipping line is the Golden Gulf Line and Sea Sky Shipping. The bill of lading Ex. PW-1/K1 and Pw-1/K3 incorporates a certificate ''receivedby the carrier from the shipper''.Thus when the carrier is the shipping line and the shipper is the defendant there is no material to hold that the plaintiff was a transporter of the consignments. Even in Ex. Pw- 1/K2 there is a certificate that in respect of the multi model transport from the place at which the goods are taken in charge to the place designated for delivery the responsibility is of the Sea Sky shipping. There is also record that 'Inland Haulage Prepaid''.The consignor is the defendant and not the plaintiff and the transporter is Sea Sky Shipping and not the plaintiff.
Thus the Ld. Trial Court erroneously proceeded on the premise that the plaintiff was a transporter without having any evidence of such character of the plaintiff. At the same time, it ignored the documentary proof of the business of the plaintiff 12 that it was a Custom House Clearing Agent. Therefore, when the defendant itself admits that it had transactions over a long period of time the only conclusion that can be drawn is that these transactions related to customs clearing only.
It is on account of this misdirection, it appears that the Ld. Trial Court laid stress on the production and proof of accounts. It may be mentioned here that the Ld. Trial Court seems to have believed the statement of DW-1 that bills Ex. PW- 1/D1 to D6 had not been received by the defendant while disbelieving the similar statement made by the Manager of the plaintiff Company that these bills had been sent to the defendant. Why it preferred one statement to the other is not clear, however, it may be mentioned that in the written statement the defendants have not specifically denied their liability to pay against the bills. What has been stated in defense is that the defendant was entitled to claim damages amounting to approximately Rs. 8 lakhs from the plaintiff. However, the defendant does not raise a counter claim in the present case. Neither has the defendant proved the damages to have a set off, nor has it proved its entitlement to damages to the tune of Rs. 8 lakhs from the plaintiff. That being so, when the total amount of the bills referred in the suit as Rs. 15,433/- has not been questioned, the insistence on audited statement 13 of accounts was not called for. In the affidavit of DW-1, Rahul Ahuja, it is claimed that the deponent had paid the freight charges to the plaintiff. This is an admission that freight charges had been borne by the plaintiff but it is claimed that the payments had been made. The defendant had to prove that such payments had been made by producing independent evidence. It was not for the plaintiff to prove the defendants' contentions that the defendant had made payments. That is precisely what has been stated by DW-1 in his affidavit in para no. 4 that the books of account had not been produced because the defendant had paid the freight charges to the plaintiff. If the plaintiff had failed to produce these details nothing prevented the defendant from producing its statement of accounts or other evidence of payment to prove beyond any doubt that the plaintiff was claiming amounts that stood already paid to it.
As regards the bills Ex. PW1/D1 to D6 reference may be made to the testimony of DW-1 in cross examination. Evasive answers have been given to questions put to him regarding the method of transmitting bills by the plaintiff to the defendant. Thus the DW-1 while admitting that he had received the original bills of lading from the plaintiff claimed that Ex. PW-1/D1 to D6 were not received by him and was unwilling to disclose whether 14 the goods mentioned in Ex PW-1/D1 to D6 had been sent to the destination or not. He admitted that along with the bills of lading the defendant used to receive the shipping bills and the bills in respect of consignments exported and when confronted with 3 receipts of the courier, was unwilling to admit or deny the receipt of documents vide these couriers. Thus the claim that the bills were not received appears to be false. When in routine bills of lading and other bills were being received by the defendants from the plaintiff it is not possible that while the bills of lading in respect of the 3 consignments in question were received by the defendant the other bills relating to the expenditure incurred by the plaintiff alone would not have been received by the defendant. The plaintiff would not have sent only the bills of lading when the usual practice was to forward all bills involved in the export to the defendant for payment.
Thus the evidence establishes that the plaintiff and the defendant had transactions which included the 3 consignments in question. Bills of lading had reached the plaintiff. The bills of lading are to be presented by the defendant to receive payments for the consignment. It is not the case of the defendant that these bills of lading were never presented. In such circumstances, obviously the consignments had been 15 delivered. In other words the goods were cleared for export. The bills raised by the plaintiff were towards its services rendered and expenses incurred. The defendant was liable to make good this payment.
As regards the issue no. 1 regarding the authority of Sh. J. S. Ahluwalia to file the suit, it has been repeatedly observed by the superior Courts that even if the original resolution has not been placed on the record if from the material on record it is clear that the company was ratifying the acts of the Director or Managing Director in the institution of a suit, the suit ought to be dismissed. The plaintiff is a private limited company and Ex. PW- 1/8 which is a certified copy of the Board Resolution, certified by the Managing Director, reveals that there are two Directors and a resolution had been passed by them. The filing of the present appeal is once again the proof of ratification of the action of J. S. Ahluwalia., Managing Director for the institution of the case and its prosecution. The technical objection raised does not merit any consideration. Moreover, the Minutes Book was produced before this Court. {(1996) 6 SCC 660 relied).
In the circumstances, the appeal is accepted. The impugned judgment and decree of the Ld. Trial Court dated 02.08.06 is set aside. The suit of the plaintiff is decreed for a sum of Rs. 15,433/- with interest @ 6% per annum from 12.12.03 till 16 date of recovery. Costs of the appeal are also awarded. Decree Sheet be prepared accordingly. Trial Court record be returned with a copy of this order. File related to the appeal be consigned to Record Room.
Announced in the open court on this 29th day of November, 2007. (ASHA MENON) ADDL. DISTRICT JUDGE, DELHI.