Bombay High Court
Ial Logistics India (A Division Of Ial vs Quantum International on 28 July, 2011
Author: Anoop V. Mohta
Bench: Anoop V. Mohta
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dgm
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
SUMMONS FOR JUDGMENT NO.112 OF 2010
IN
SUMMARY SUIT NO. 3068 OF 2008
IAL Logistics India (a Division of IAL
Container Line (India) Ltd. .... Plaintiff s
vs
1 Quantum International
2 Mr. Jayant A. Gidwani
3 East West Freight Carriers Pvt.Ltd. ... Defendants
Mrs. Bharati Narichania with Ms. Vijaya Bane i/by M/s.Vibha
Jurisconsult Co. for the Plaintiffs.
Mr. U. J. Makhija with Mr. Amin Kherada for Defendants 1 and 2.
CORAM: ANOOP V. MOHTA, J.
RESERVED ON : July 15, 2011
PRONOUNCED ON: July 28, 2011
JUDGMENT:
The present Summons for Judgment is taken out by the Plaintiffs in a Summary Suit for recovery of unpaid freight and other incidental charges by the Defendants in a sum of ` 8,33,656/- with interest at the rate of 18% per annum from 1 January 2006 upto 25 September 2008.
2 The Plaintiffs carry on a business as Consolidators and Freight ::: Downloaded on - 09/06/2013 17:34:02 ::: 2 sj-112-10.sxw Forwarders. Defendant no.1 is the sole proprietary concern and doing a business as exporters of garments. Defendant no.2 is also carrying on business of the same nature. Defendant no.3 is an internationally approved Freight Forwarding Agents for carriage of goods by Air and stated to be the authorised agent of the carriers of the consignments in question. Defendants 1 and 2 were the owner of the consignments consisting of cotton woven garments which were entrusted to the Plaintiffs for effecting shipment to New York. No relief is claimed against Defendant no.3.
3 The Plaintiffs effected the carriage by Air of the four consignments to New York. The Airway bills (The bills) reflect, apart from number and date, Defendant no.1- M/s. Quantum International as the consignees. The bills were signed by the Plaintiffs for and on behalf of Defendant no.3 as Agents. As per the Plaintiffs, it was mutually agreed that the bills would be marked as "Freight pre-paid";
and Defendants 1 and 2 would be allowed thirty days credit to pay the Plaintiffs dues. The Plaintiffs, therefore, based upon an oral assurance, as alleged, delivered the goods and expected the payment from the Defendants to them or to their counter part in Dubai.
::: Downloaded on - 09/06/2013 17:34:02 :::3 sj-112-10.sxw 4 The Plaintiffs' case is that Defendant no.3 had issued Master Airway bills on behalf of the Airline i.e. Swiss World Cargo corresponding to the Airway bills which were also endorsed "Freight pre-paid" and the Plaintiffs were named as "shippers". As alleged, the Plaintiffs had already paid freight payable in respect of the said consignment in advance to Defendant no.3 as Agents for the carriers of Airline, therefore, has filed the present recovery Suit for the due freight charges from Defendants 1 and 2. The Plaintiffs had also issued four invoices aggregating to ` 5,58,404/- in respect of the said freight and other charges payable on the four consignments which were delivered at the destination to the consignee, M/Quantum International Trade, a sister concern of Defendants 1 and 2.
Defendants 1 and 2, inspite of repeated reminders, oral, as well as, in writing, failed to make the payment. The Plaintiffs had filed similar Suits against Defendants 1 and 2 for the other consignments. A legal notice dated 19 June 2006 was also remained unreplied. Therefore, this Suit, based upon the four invoices and the bills. Defendant no.2 has filed the reply and resisted the claim on various grounds.
5 Admittedly the Defendants had entrusted the six consignments for shipment to USA and Dubai along with the relevant documents.
::: Downloaded on - 09/06/2013 17:34:02 :::4 sj-112-10.sxw Five consignments of USA were delivered to the consignee at USA.
One consignment of Quantum International LLC, Dubai was not delivered. It was accordingly recorded by e-mail dated 25 December 2005. The withholding of goods is a basic objection, as it causes loss of business, profit and reputation. There is an e-mail on record to show that the Plaintiffs communicated their inability to release the consignment for want of non-payment of overdue invoices.
6 The Plaintiffs by notice dated 10 May 2006 called upon the Defendants to pay the freight charges in respect of all six consignments though the last consignment valued about US $ 9788.60 was not delivered.
7 The Plaintiffs have filed the present Suit for four consignments/invoices, and Suit No.3069/08 for remaining one.
Suit No.3426/2008 is for the freight and other charges of Dubai consignment.
8 It is clear that the Plaintiffs by a composite notice demanded freight charges of six consignments, though they withhold last consignment of Dubai of US $ 9788.60. The Plaintiffs' action of non-
::: Downloaded on - 09/06/2013 17:34:02 :::5 sj-112-10.sxw delivery caused loss of business, profit and reputation as Defendants customers cancelled the orders also. The Plaintiffs' Agent/Dubai Office, even otherwise being bailee ought not to have retained the consignment on the ground of non-payment of freight charges as done in the present case. The said retention/withholding of the goods by the Plaintiffs Agent at Dubai, in the present facts and circumstances of the case, just cannot be overlooked. The right of defence to set off their loss against the plaintiffs' claim is also relevant factor.
9 The bills show that the amounts/freight were pre-paid. The case of the Plaintiffs that it was mutually agreed that the Airway bills would be marked as freight pre-paid; and Defendants 1 and 2 would be allowed thirty days credit to pay the Plaintiff's dues; and the assurance that they would make the payment after effecting the carriage and upon the receipt of the Plaintiffs invoices, in Dubai, for want of written documents, just cannot be accepted at this stage.
Such oral contract, even if any, unless substantiated by the Plaintiffs, in my view, it is not the case to grant Summons for judgment as prayed.
10 11 The scheme and purpose of Order XXXVII of th Code of ::: Downloaded on - 09/06/2013 17:34:02 ::: 6 sj-112-10.sxw Civil Procedure (CPC) can be summarised as under :
The purpose & the basic of summary suit:
(a) A Plaintiff, if chooses to invoke the provisions of Order XXXVII for recovery of amount, the basic obligations and elements as required need to be fulfilled. The summary suit so filed must fall within the four corner of Order XXXVII for getting judgment/decree summarily.
(b) As per Rule 227 of the Bombay High Court (Original Side) Rules, 1980, the Plaintiff must take out an appropriate proceeding within six months once such Suit is instituted, though it is subject to condonation of delay, if case is made out.
(c) The object of Order XXXVII is to recover the crystalised dues, liquidated, admitted, acknowledged debt/monetary claim by a summary procedure, without long trial, principally based upon a written document executed in the course of business, in accordance with law. It is a supportive measure for recovery of unpaid debt/amount covering all the negotiable instruments as contemplated under the Negotiable Instrument Act, apart from a valid, written ::: Downloaded on - 09/06/2013 17:34:02 :::
7 sj-112-10.sxw contract/receipt/acknowledgment. It may be an express term or an implied term, based upon facts and circumstances of the case, considering the practice, trade and usage of the commerce and the trade. This also covers apart from principal amount, express or implied terms of the interest.
The Plaintiff's and Defendant's respective obligations:
(d) A Plaintiff having once instituted a summary suit is under obligation firstly, to serve the Defendant, a summons for appearance by providing copy of plaint and annexures. The Defendant, upon such service, needs to appear within 10 days from the date of the service either in person or through an Advocate. If the appearance is made, either in person or through the Advocate, the Plaintiff is required to serve the summons for judgment on the given address.
(e) The Defendant is entitled to file a reply and/or an application for grant of leave to defend the Suit, within 10 days of service of summons with the averments and the supporting documents entitling him leave to defend the Suit. Such application or affidavit reply shall be supported by an affidavit.::: Downloaded on - 09/06/2013 17:34:02 :::
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(f) If the Defendant fail to enter appearance inspite of the service, the Plaintiff's averments/allegation, if supported by due documents/material, shall be deemed to be admitted and entitled for a judgment/decree for the amount so prayed. The Defendant though filed appearance but failed to file reply or defence or remained absent inspite of filing of service, the Court may pass judgment/decree as prayed in accordance with law.
The Court needs to exercise the discretion judicially:
(g) Though basic burden lies upon the Plaintiff to prove and satisfy the Court that the claim so raised and prayed for decree falls within the ambit and scope of the summary procedure in question. Once the Court comes to a conclusion that Plaintiff has made out a case for summons for judgment or the Defendant has made out a case for unconditional or conditional leave, after considering the facts and circumstances of the case, need to exercise discretion in either way based upon the settled position of law.
(h) The Defendant is able to demonstrate through the affidavit in ::: Downloaded on - 09/06/2013 17:34:02 :::
9 sj-112-10.sxw defence and/or averments made in application/affidavit for leave to defend that the Plaintiff has not made out a bonafide and clear case and on the contrary the defence so raised is bonafide reasonable and good defence and raises the plausible /triable issues the Defendant is entitled to unconditional leave to defend.
(i) But, after the defence so raised by the Defendant and the Court is satisfied that the Defendant may at the trial able to establish a defence and/or there is material placed on record, though not fully supportive, the Court may grant conditional leave, directing the Defendant to deposit the amount in the Court in full and/or in part and/or to furnish the security by possible permitted modes pending the trial.
The grant of Decree or Summons for Judgment with agreed interest:
(j) The Court, if, comes to a conclusion that there is no defence and/or it is sham, bogus, illusory and moonshine, the Court may refuse to grant leave to defend and pass/grant summons for judgment or decree as prayed by the Plaintiff.::: Downloaded on - 09/06/2013 17:34:02 :::
10 sj-112-10.sxw The Interest:
(k) The Court needs to consider the aspect of agreed rate of interest on the principal amount so claimed and the future interest also.
The condition should be reasonable, practicable and not be onerous or burdensome:
(l) It is also necessary for the Court while exercising a jurisdiction to see that while granting leave to defend, contention should not be unduly onerous that results into depriving and/or unable to defend the defence so raised. The Court, therefore, needs to exercise discretion cautiously and carefully while passing the conditional or any such order in summary suits.
11 In the present case though there are invoices/Airway bills are the foundation for the summary suit, yet, in view of the fact that the case is also based upon the oral agreement or promise, unless decided by the evidence cannot be the foundation to grant the decree at this stage. The Plaintiffs Agent has admittedly retained/withhold the Dubai consignment worth of US $ 9788.60, which is definitely more than the amount claimed in the Suit and as demanded through the composite notice, as referred above.
::: Downloaded on - 09/06/2013 17:34:02 :::11 sj-112-10.sxw 12 There was no question of claim of interest at 18% per annum on the freight charges so raised as there was no such agreement. On the contrary, the case of the Defendants is that the payment to be made, if any, after 90 days and not 30 days as claimed. The claim of interest at the rate of 18% per annum from 1 January 2006 to 25 September 2008 on the aggregate sum of ` 8,33,656/- based upon four invoices and further 18% from the date of filing of the Suit till realisation is also a matter of debate.
13 The Plaintiffs have filed different Suits as recorded above and thereby separated the claims of freight charges even of non-delivery of goods/consignment at Dubai. The composite notice/demand so raised and considering the invoice and the averments made in the present plaint, in my view, the facts and documents of the Suits are interlinked and interconnected. All in all triable issues for detail consideration are raised.
14 The Airway bills were signed by the Plaintiffs for and on behalf of Defendant no.3 as Agents. Defendant no.3 had issued last Airway bill on behalf of the Airlines. The same was marked "freight pre-paid".
::: Downloaded on - 09/06/2013 17:34:02 :::12 sj-112-10.sxw The Plaintiffs were named as shippers. The Suit, at the instance of Plaintiffs as Agents itself raises issues about the maintainability of the Suit itself.
15 The4refore, the Plaintiffs claim, even if any, cannot be stated to be without any security. In my view, apart from other grounds, the amount is already secured by the Plaintiffs. The defence so raised by the Defendants therefore cannot be stated to be sham, bogus or false and/or with an intent to delay the payment or avoid the payment.
The Defendants therefore have made out a case for unconditional leave to defend.
16 Resultantly, the Defendants are entitled to unconditional leave to defend the Suit. The Defendants to file written statement within thirty days from the date of receipt of copy of this order. The Summons for judgment is disposed of accordingly. There shall be no order as to costs.
(ANOOP V. MOHTA, J.) ::: Downloaded on - 09/06/2013 17:34:02 :::