Madras High Court
Canara Bank vs Srinivasa Home Appliances (P) Ltd., ... on 16 December, 2002
JUDGMENT K. Govindarajan, J.
1. The appellant who is the plaintiff in C.S. No. 973/1988 has filed the above Appeal aggrieved against the dismissal of the suit in he judgement and decree dated 12.8.1996.
2. The appellant-bank at the request of the 1st respondent, granted loan facilities like Open Cash Credit, Pay Cash Credit loan and Bills facilities. It is the case of the appellant that the 1st respondent is indebted to the appellant a sum of Rs. 10,60,395-19 towards the above said facilities granted to them. At the instance of the 1st respondent, the appellant established the Revolving Letter of Credit in favour of the 8th respondent for a sum of Rs. 7,00,000/- for full invoice value relating to Black and White/ Colour Television sets. According to the terms of the said letter of credit, the documents have to accompany the bill drawn under the credit including signed invoices in triplicate and Air-consignment note to be made out to the order of the appellant. The 8th respondent sent television sets under Air Consignment Note No. 5686237 dated 10.1.1986 through the 7th respondent. The consignee referred to in the said Air-consignment Note is the appellant ., though it is on account of the 1st respondent. Since the appellant did not receive any intimation or reminder as to the consignment, the appellant sent a letter on 10.4.1985 to the 7th respondent requesting not to release the goods without the documents discharged. Even thereafter on 22.9.1985 similar letter was sent to the 7th respondent. The 7th respondent in the letter dated 23.8.1985 informed the appellant that the goods were delivered on 28.1.1985 after settling demurrage and freight charges. The 7th respondent informed the appellant that the shipment was released as instructed by the 8th respondent to the 1st respondent. So, the appellant came forward with the suit stating that the 7th respondent had delivered the goods contrary to the obligation under Air-consignment note, to the person other than the consignee and so the 7th and 8th respondents are liable to pay a sum of Rs. 7,00,000/- with interest at 20% from the date of plaint till date of payment.
3. With respect to the 8th respondent, it is stated that the 8th respondent, after having received the payment of the value of the goods on the basis of Letter of Credit established by the appellant, enabled the 1st respondent to take delivery of the goods, contrary to the instructions contained in the Letter of Credit and Air-Consignment note.
4. On the basis of the above pleadings, the appellant filed the suit praying for a decree directing the defendants 1 to 6 jointly and severally to pay the appellant the said sum of Rs. 10,60,395.19 with further interest thereon at 18% p.a. from the date of plaint till date of payment and directing respondents 7 &8 jointly and severally to pay the appellant the sum of Rs. 7,00,000/- with interest at 20% p.a. from the date of plaint till date of payment.
5. The 1st respondent did not file any written statement.
6. Respondents 7&8 filed written statement and additional written statement. According to the 7th respondent, the appellant is not the consignee of the goods. But the 1st respondent is the consignee. They delivered the goods to the 1st respondent as instructed by the 8th respondent without insisting the original consignment copy and so they are not liable to pay the said amount as claimed by the appellant.
7. The 8th respondent filed written statement stating that the suit is barred by limitation as against the 8th respondent. It is admitted that 135 television sets under air-consignment note dated 10.1.1985 through the 7th respondent was "consigned to the appellant account to the 1st respondent". It is further stated that the 8th respondent had entrusted the consignment to the 7th respondent for delivery at Madras to the consignee and on such entrustment, the 8th respondent's obligation is fulfilled under the contract and so they are not liable to pay the amount as claimed by the appellant. It is further stated that if the goods were delivered by the 7th respondent, the 7th respondent alone is liable for the same.
8. The learned Judge in the judgement & decree dated 12.8.1996 dismissed the suit holding that the goods were meant only for the 1st respondent as the title to the goods was with the 1st respondent and so the appellant bank cannot claim to be the consignee of the goods. The learned Judge also found that there is no privity of contract between the appellant and the 8th respondent. The learned Judge while considering the fact that only on 10.4.85 the appellant wrote a letter to the 7th respondent, though the consignment reached earlier, and the appellant-bank received the original consignment note only in March 1985. On that basis the learned Judge found that the appellant did not chose to make any claim or demand that it is their consignment and so the appellant is not entitled for any claim against the respondents 7&8. The learned Judge had also rejected the claim against the 1st respondent with respect to the sum of Rs. 10,60,395.19, though there is no written statement filed by the 1st respondent before the court disputing the liability.
9. We are not inclined to go into that liability of the 1st respondent now in this appeal as the appellant did not take steps to serve notice on the 1st respondent. Without giving an opportunity to the 1st respondent, the dismissal of the suit in his favour cannot be reversed. Though 1st respondent did not file any written statement before the trial court, it cannot be said that no notice need be served on the 1st respondent in this Appeal. So, this Appeal in so far as it relates to the rejection of the appellant's claim against the 1st respondent cannot be sustained. Respondents 2 to 6 also were been given up even in the suit. So, the appellant-bank is not entitled to any relief against respondents 1 to 6.
10. The point for determination in this Appeal is whether the respondents 7 &8 are liable to pay the sum of Rs. 7,00,000/- with interest as claimed by the appellant.
11. It is not in dispute that the appellant-bank at the request of the 1st respondent established the Revolving letter of Credit in favour of the 8th respondent for a sum of Rs. 7,00,000/-, towards full invoice value relating to Black and White and Colour television sets under Ex.P8 dated 28.11.1984 and 135 television sets were sent under Ex.P9 Air-consignment note. In the said Air-consignment note, it is specifically stated that the consignee is the appellant bank, but it is to the account of the 1st respondent. The 8th respondent even in the written statement specifically stated that the consignee of the goods is the appellant. On the other hand the 7th respondent, in the written statement stated that the appellant is not the consignee. Even in chief examination, P.W.1 the Deputy Manager (Commercial) of the 7th respondent deposed that the 1st respondent is the consignee and the goods were delivered to under Ex.P9 to the 1st respondent who is the consignee. It is also specifically admitted in the cross examination that the 8th respondent authorised the 7th respondent to deliver the goods to the consignee and there is no reference to deliver the goods to the 1st respondent.
12. 'Consignee' has been defined in Stroud's Judicial Dictionary as follows:
"A Consignee of cargo is a person residing at the port of delivery to whom the goods are to be delivered when they arrive there"
In the present case, under Ex.P9, Air-consignment note, it is specifically mentioned Canara Bank, South Extension , Madras as consignee. The 7th respondent to escape from their liability stated that the appellant did not claim the goods with the Air-consignment note immediately. In view of the delay in receiving the Air-Consignment Note, the consignor, the 8th respondent instructed to deliver the goods to the consignee without insisting for the original Air consignment Note and so they have delivered the goods to the 1st respondent. To sustain the said stand, the 7th respondent also came forward with the specific plea that the appellant is not the consignee and so the goods were delivered to the 1st respondent as instructed by the 8th respondent. As mentioned already, it is contrary to the case of the 8th respondent and Ex.P9, the Air-consignment note. Even the said plea is contrary to the documents marked in this case.
13. Ex.D8 is the Letter of the 8th respondent dated 22.1.1985 in which it is stated that " in order to avoid further delay on account of demurrage, we hereby authorise you to waive the condition of "DAVC" and would request you to send a telegram to Madras Airport office to effect delivery without insisting for consignee copy". The said letter was sent to Cargo Manager, Indian Airlines, Faridabad. So, it is clear from the said instruction of the 8th respondent it is not an instruction to deliver the goods to the 1st respondent but only to the consignee, without insisting for consignee copy. Even under Ex.D3, the letter sent by Station Manager, Indian Airlines, Faridabad, dated 22.1.1985 on the basis of the letter Ex.D8, it is stated as follows:
"We recommend delivery of the shipment to consignee without producing consignee copy in view of the contents of the letter. The consignors are our very regular and reliable clients."
Even in this letter, no permission was granted to deliver the goods to the 1st respondent, but the goods should be delivered only to the consignee. So, the case of the 7th respondent that the goods were delivered to the 1st respondent as directed by the 8th respondent cannot be accepted.
14. Part III in Chapter 2 to the I Schedule of the Carriage By Air Act, 1972 prescribed the liability of the carriage if the goods were delivered without proper document. Under Rule 12(3) of Part III of the said Act, it is stated as follows:
"If the carrier obeys the orders of the consignor for the disposition of the goods without requiring the production of the part of the air consignment note delivered to the latter, he will be liable, without prejudice to his right of recovery from the consignor, for any damage which may be caused thereby to any person who is lawfully in possession of that part of the air consignment note."
15. The entitlement of notice to the consignee on arrival of the goods at the place of destination is set out in Rule 13, which is as follows:
"13(1) Except in the circumstances set out in rule 12, the consignee is entitled, on arrival of the goods at the place of destination, to require the carrier to hand over to him the air consignment note and to deliver the goods to him, on payment of the charges due and on complying with the conditions of carriage set out in the air consignment note.
(2) Unless it is otherwise agreed, it is duty of the carrier to give notice to the consignee as soon as the goods arrive.
(3)If the carrier admits the loss of the goods or if the goods have not arrived at the expiation of seven days after the date on which they ought to have arrived, the consignee is entitled to put into force against the carrier the rights which flow from the contract of carriage."
16. From the above said provisions, it is clear that the appellant is entitled to a notice from the 7th respondent on arrival of the gods at the place of destination for handing over the same to the appellant on payment of charges due therein.
17. In the present case, admittedly no notice was given by the 7th respondent to the appellant either on receipt of the consignment or before the delivery of the same to the 1st respondent. The 7th respondent came forward with the defence that the appellant did not produce the consignment note within two days and so they delivered the goods to the first respondent as instructed by the 8th respondent. When the 7th respondent is having an obligation to send an intimation to the appellant regarding the arrival of the goods, and having failed to discharge the same, it is not open to them to come forward with the plea that the appellant did not approach them with the consignment note, within 2 days on receipt of the consignment note. Along with the goods, the 7th respondent had received the copy of the Air consignment Note in which it is clearly stated that the appellant is the consignee of the goods. Merely because it is mentioned as if it was sent on account of the 1st respondent, there need not be any misgiving that the consignee was not the appellant. It is clear that only the appellant has to endorse the consignment note in favour of the 1st respondent on realisation of the amount due to it. The 7th respondent ought not to have handed over the consignment to the 1st respondent. The delivery of goods to the 1st respondent is nothing but unauthorised when the consignment was addressed to the appellant especially when there was no authorisation by the consignor themselves authorising the 7th respondent to deliver the goods specifically to the 1st respondent.
18. Learned counsel appearing for the 7th respondent submitted that the goods were sent only for the benefit of the 1st respondent and so the 1st respondent alone can be the consignee. We need not go into the question for whose benefit the goods were sent, but we are concerned as to who is the consignee of the goods and to whom the goods are to be delivered on the goods arriving at the destination.
19. The consignee need not be the owner of the goods. But, according to the above said provisions, the 7th respondent is having the obligation to deliver the consignment only to the consignee and they need not probe into the ownership of the goods.
20. Learned counsel for the 7th respondent submitted that they have delivered the goods to the 1st respondent only on the basis of Ex.D8 and on the consequential letter, mentioned above. Even here, we are not in a position to accept the said statement for the reasons already stated above. In those letters there is no specific direction to deliver the goods to the 1st respondent as alleged by the 7th respondent, and as contended by the learned counsel for the 7th respondent.
21. The learned Judge without appreciating the scope of the consignment note, simply proceeded as if the 1st respondent is the owner of the goods and so the appellant bank cannot be construed as the consignee. Learned Judge considered the delay on the part of the bank in approaching the 1st respondent to deny the said claim. As per the provisions set out supra, it is not the obligation on the part of the appellant to approach the 7th respondent, but in turn, the obligation is on the part of the 7th respondent to send a notice of the arrival of the goods to the appellant. The 7th respondent admittedly did not take care even to inform the appellant before delivering the goods to the 1st respondent without the original consignment copy. This aspect was not at all considered by the learned Judge and so the learned Judge erroneously rejected the claim made by the appellant as against the 7th respondent.
22. In so far as the 8th respondent is concerned, though the appellant paid the money to the 8th respondent, we cannot accept the claim of the appellant against the 8th respondent, as the 8th respondent discharged his obligation in accordance with law. He never instructed the 7th respondent to deliver the goods to the party other than the consignee. It is only the 7th respondent who had, negligently and without authority delivered the goods to the 1st respondent. Even from the above discussions, it is clear that the 8th respondent cannot be made liable for the negligence on the part of the 7th respondent in delivering the goods to the 1st respondent. Hence the claim made against the 8th respondent by the appellant is rejected.
23. For the reasons stated above, the judgement and decree of the learned Judge in so far as they relate to the 7th respondent are concerned, are set aside, and the appellant is entitled for a decree as prayed for as against the 7th respondent. It is for the 7th respondent to take appropriate proceedings against the 1st respondent to recover the dues.
24. Hence, the suit is decreed as prayed for as against the 7th respondent, and, accordingly, this appeal is allowed partly to that extent. In other respects, this appeal is dismissed. No costs.