Delhi High Court
Jai Narain N. Sadh Shadwara vs Pan American World Airways And Ors. on 19 February, 1986
Equivalent citations: 30(1986)DLT497
JUDGMENT M.K. Chawla, J.
(1) By this order I propose to dispose of Defendant No. 3's application, I.A. 4060/85 in Suit No. 1693/83 and I. A. 4059/85 in Suit No. 1694/83. However, the facts of Suit No. 1693/83 are being taken into consideration for the purpose of disposing of these applications.
(2) In a suit for recovery of Rs. 10,30,49007, the case set up by the plaintiff, M/s. Jai Narain N. Sadh. Sadhwara, in brief, is that the Plaintiff firm air freighted the four consignments of cotton printed cloth articles through Pan American World Airways, Defendant No. 1 of the total value of Rs. 2,91,700.00 from Delhi for being safely carried to and to be delivered in sound condition at the destination airport, Armsterdam of Holland, to the consignee. Defendant No. 3, Armsterdam Rotterdam Bank N.V. (hereinafter called "Amre Bank") or to the proposed customer after due authorisation for the same by the consignee or consignor, the Plaintiff firm. Defendant No. 2, Ambar Tours Private Limited acted as an authorised agent of Defendant No. 1 and completed all the usual formalities of issuing airway bills etc; to the plaintiff firm. Later on Defendant No. 1 informed the Plaintiff firm that the aforesaid shipment reached at Armsterdam Airport and the consignee bank, Defendant No. 3 and the proposed buyer. Defendant No. 4. B.S.A International B.V. claim to accept the said shipment one by one during certain span of time, which was acceptable to Defendant No. 1. The Plaintiff firm. however, on 23rd April, 1982 received a letter from Defendant No. 1 informing that the said consignments were abandoned due to non-delivery of all the consignments on that very day. The Plaintiff firm asked for the better particulars from Defendant No. 1 about the fate of their consignments, but inspite of repeated attempts nothing could be achieved. The Plaintiff firm also sent one of their representatives to the office of Defendant No. 1 who was informed that the consignment had been auctioned by Defendant No. 1 at Armsterdam. This act of the Defendant No. 1 is against principles of International Law relating to the trade of transport as a result of which all the Defendants have become liable to the present claim. Hence, the suit.
(3) Defendants No. 1 and 2 in their separate written statements raised a number of preliminary objections to the maintainability of the present suit and also contested the claim of the Plaintiff on merits. Defendant No. 3 has not filed the written siatement, but has preferred to move the application I.A. 4060/85 under Order 1 Rule 10 (ii) and Order 7 Rule 11 Civil Procedure Code . for striking of the name of Defendant No. 3 from the array of Defendants and the dismissal of the suit against them with compensatory costs. This very application is under consideration.
(4) It is the case of Defendant No. 3 that as per the averments in the plaint, the goods were dispatched for Defendant No 4 and the applicant/ Defendant was approached by Plaintiff's bankers, the State Bank of India Farrukabad and the Chartered Bank, Kanpur to remit the amounts upon receipt from the foreign buyers. Defendant No. 4 to the said bankers. The bill of exchange etc., relating to the consignment were sent to the applicant/ Defendant for collection and release of such documents upon receipt of payment from Defendant No. 4. There was no offer or acceptance or any contract between the plaintiff and the Applicant/Defendant that upon the default of the foreign buyers, Defendant No. 4 to pay and collect documents, the Applicant/ Defendant shall act as the clearing agent of the Plaintiff, clear the goods from the air-craft on payment of customs duty and other charges at the airport, store the goods, act and incur all relative charges, as no consideration was ever received or agreed to be received by the Applicant. Under these circumstances, the plaint discloses no cause of action and even otherwise the Applicant/Defendants are not amenable to the jurisdiction of this court, inasmuch as neither there is any privity between the Plaintiff and the Applicant/Defendant, nor any came of action arose to the Plaintiff within the jurisdiction of this Court. Hence, this present application.
(5) This application is being opposed by the Plaintiff as well as Defendant No. 1. According to the Plaintiff, the plaint completely discloses cause of action against Defendant No. 3 Along with other Defendants and without filing of the written statement, it is not desirable to strike off their name from the array of Defendants. It is alleged that the Applicant/ Defendant No. 3 had a contract with the Plaintiff firm through Plaintiff's agent, the Chartered Bank, Kanpur and the State Bank of India, bankers of the Plaintiff firm, wherein they were described as the consignee bankers. It is also alleged that the Defendants No. 1 and 2 in collusion with Defendant No. 3 have illegally auctioned the consignment in question in order to usurp the amount of the goods. Being a consignee-bank, the Defendant No. 3 was duty bound to give complete information at each stage in respect of the status of the consignment and having failed to perform their duties, cannot escape from law. Furthermore, the proposed customer, Defendant No. 4, had an account with Defendant No. 3, Bank, who accepted the position and acted as consignee bank on behalf of Defendant No. 4, which resulted in privity of the contract between the Plaintiff and the Applicant. Defendant No. 3 is not only a property party, but also a necessary party and the application being false to their knowledge merits dismissal.
(6) Almost similar pleas have been raised by Defendant No. 1 in their reply. Furthermore, it is alleged that without the filing of the written statement, the Applicant/Defendant cannot be allowed to challenge the maintainability of the suit against them by way of moving the present application. In case the application of Defendant No. 3 is allowed, the real culprit will go scot-free and also will cause serious prejudice and injustice to the Plaintiff and Other/Defendants.
(7) I have heard the arguments of the learned counsel for the parties and with their help gone through the record carefully.
(8) Except the bare allegation in the plaint that the Defendant No.3 was a consignee of the goods and wag duty bound to send the amount to the bankers of the Plaintiff, unfortunately no documentary evidence is being produced to substantiate this averment. Admittedly, there is no private of contract between the Plaintiff and the Defendant No 3 regarding consignment in suit nor at any stage the Defendant No. 3 had undertaken to take delivery of the goods or keep them at their risk and responsibility. In such a situation. Article 6 of the Uniform Rules for Collection which are applicable to the International Chamber of Commerce will come into play. This rule states: "GOODS should not be dispatched direct to the address of a bank or consigned to a bank without prior agreement on the part of that bank. In the event of goods being dispatched direct to the address of a bank or consigned to a bank for delivery to a drawee against payment or acceptance or upon other terms without prior agreement on the part of that bank, the bank has no obligation to take delivery of the goods, which remain at the risk and responsibility of the party dispatching the good*"
(9) This Article fairly applies to the facts of the present cage. Learned Counsel for- Defendant No. 1 placed reliance on Article 20(iii)(a) of these rules which lays down that the collecting bank must send without delay advice of payment to the bank from which the collection order was received, detailing the amount or amounts collected, charges and/or disbursements and/or expenses, where appropriate, method of disposal of the funds. This rule, to my mind, does not help the case of the Plaintiff or the Defendant No. 1. As soon as Defendant No. 4 failed to retire the documents. Defendant No. 3 took steps to send the original documents concerning the consignments in question to the Plaintiff's bankers, thereby intimating that the amounts of the consignments have not been received. This is the maximum the foreign bank could do under the circumstances and beyond that they were not responsible. This position finds supported from copies of original bill and the documents forwarded to Defendant No. 3 by the Chartered Bank, Kanpur. Instructions to the foreign bank were to deliver the documents against acceptance or payment. Under the special instructions the foreign bank wa(r) directed that if the bill is not paid on first pregentation, they could collect interest at the rate of 19" per annum from the first presentation to the date of arrival of remittance in Kanpur. The Plaintiff does not come in the picture anywhere. Furthermore, State Bank of India, vide their letter dated 11th December. 1981 requested Defendant No. 3 that Defendant No. 4 will approach their bank and pay the amount of the consignment, which should be Immediately remitted to the plaintiff bankers.
(10) It is the case of Defendant No. 3 that they waited for quite sometime for Defendant No. 4 to retire the documents on payment of the amount of the consignment, but as they failed to approach the Applicant bank, documents were duly returned. In fact, Defendant No. 4 has not remitted the amount to the applicant bank, who in turn. was not liable to make the payment. The original bill and the other documents were received by ihe applicant bank on 3rd November, 1981 and the same were returned to the Chartered Bank on 8th December, 1981. The applicant bank, to my mind, was not under any obligation to take physical delivery of the goods and store them without any specific agreement/contract in that behalf.
(11) Learned Counsel for the Plaintiff, in order to bring in the Applicant Bank, placed reliance on the letter dated 7th June, 1982 from the Chartered Bank to the Applicant Bank wherein they have shown heir surprise as to how the goods have been sold at auction by PAN-AM Airlines at Armsterdam without obtaining a release order from the bank. It is further alleged that the Applicant Bank should have taken delivery of the goods and stored them in bonded warehouse at their risk and responsibility. This letter, to my mind, has no relevancy, unless and untill the Plaintiffs are able to show on record that there was an agreement or even an understanding with the Applicant Bank that they were required to take delivery of the goods or store them at their risk and responsibility. There being no such documents in this behalf, the Applicant Bank cannot be held responsible for the sale of the goods, if any, held by the Defendant, Airways. Learned Counsel for Defendant No. 1 objected to the maintainability of the present application on the short ground that once the summons for settlement of issues have been served on the Defendants, they are bound to file their written statement and there is no provision whatsoever in the Code which provides that the Defendant could raise any objection to the maintainability of the suit by any application before filing his defense. Reliance is being placed on the judgment reported as "Nashit M. Prabhu Verleker v. Chandranath Vlnayak Dhume and others" . The fact of the present case are quite distinguishable from the facts of this case. Moreover, I would like to rely on the judgment of our own High Court reported as "International Air Transport Association v. Smt. Aziz Fatima Hasnain and another . During the course of judgment, the learned Single Judge interpreted the provisions of Order I Rule 10(2) of the Code of Civil Procedure related to the striking off the name of a party. Relevant portion of the judgment reads as under: "SUB rule (2) of Rule 10 of Order I of the Code deals with striking off the name of any party improperly Joined whether as Plaintiff or Defendant. Power to strike off the name of any party improperly joined can be exercised at any stage of the proceedings, i.e. even before filling of the written statement. Such an order can be passed Suo Motu or on the application of the party. The question for determination is whether the party was improperly joined as Plaintiff or Defendant. If the Court concludes that Plaintiff or Defendant has been improperly joined, the name of such party can be struck out. The party introduced to a litigation who has no connection with the relief claimed in the plaint, is neither a necessary nor a proper party. The Court can, therefore, strike out under this rule the name of any such party."
(12) Even in the plaint, the plaintiff is not sure of his case against the defendant No. 3. It appears that his name has been added as one of the Defendants to avoid further complications so that they are found liable and guilty for the illegal auctioning of the consignment, they may also be made answerable to the claim Along with Defendants No. 1 and 2. Even though Plaintiff had alleged some collusion between Defendants No. 1 and 2 on the one side and Defendants No. 3 and 4 on the other side, but unfortunately this fraud of collusion has not been spelt out. Bare allegation is of no consequence.
(13) In the result, I hold that there is much substance in the Defendant's application which I hereby accept. The name of Defendant No. 3 is hereby ordered to be struck off from the array of the Defendants. Interim application of Def. No. 3 allowed