Delhi District Court
M/S Gupta Pigments & Chemicals P. Ltd vs Pacific Shipping & Forwarding on 24 October, 2008
-1- Suit No. 245/98
IN THE COURT OF SHRI NARINDER KUMAR
ADDL.DISTRICT JUDGE ; DELHI
Suit No. 245/1998 - RBT No. 1A/2004
Date of Institution: 03/04/1998
Date on which reserved for order: 18/10/2008 for 24/10/2008
Date on which judgment pronounced: 24/10/2008
In the matter of:-
M/s Gupta Pigments & Chemicals P. Ltd.
Having its registered office at 119,
Defence Enclave,
Vikas Marg, Delhi-110 092.
Through its Managing Director
Sh. Raman Gupta ....... Plaintiff
Versus
1. Pacific Shipping & Forwarding
Post Box No. 50702
Dubai, UAE.
2. Jamesh Mackintosh & Co. (P) Ltd.,
GF-1 & 2. Ram Partap House,
4, Local Shopping Centre,
Site 42, Kalkaji,
New Delhi. ....... Defendants
Suit for Recovery of Rs.3,37,412/-
Court Fees: Rs.5,640/-
JUDGMENT
1. Plaintiff instituted this suit on 02/04/1998 for recovery of Rs.3,37,412/- (rupees three lakhs thirty seven thousand four -2- Suit No. 245/98 hundred and twelve only) from the defendants, with pendelite interest @ 23%.
2. Plaintiff - a company runs business of manufacture and sale of lead oxides. Defendant No.1 is a shipping company having its office in Dubai. Defendant No.2 is agent of defendant No.1, as alleged by the plaintiff.
3. In December, 1996, plaintiff agreed to avail services of the defendants on their assurance for better and prompt service and accordingly the plaintiff recommended the shipping company. Plaintiff then availed services of the defendants in respect of lead battery plates scrap (rails) which were packed in 19 X 20' and 12x20 containers. These containers were shipped vide bill of lading dated 28/12/1996 and 23/01/1997, issued by defendant No.1 Deira Trading and Comm.Est. of Amman, Zodan was the shipper.
The aforesaid containers were released / cleared by the Customs at Port i.e. Bombay, and the same reached ICD Tuglakabad after delay of 22 days, although, as per normal time, these should have reached ICD Tuglakabad within 5/7 days.
Case of the plaintiff is that the aforesaid delay took place -3- Suit No. 245/98 because the defendants sent / filed wrong Import General Manifesto (IGM). The discrepancy were that bill of lading was not given in the IGM and false container number was given in addition to wrong weight. Vide letter dated 24/02/1997, defendant No.2, on behalf of defendant No.1 filed amendments to the IGM at Bombay. Defendant No.2 vide letter dated 01/03/1997 to Assistant Commissioner (Customs), ICD Tuglakabad, Delhi, made a request to allow the consignee - plaintiff to file papers for release of the container. Ultimately, cargo was cleared by the Customs on 05/03/1997. On 05/03/1997, another amendment in the IGM was made and filed with customs. Because of all this, plaintiff had to pay Rs.6000/- (rupees six thousand only) towards re-weighment of the container. In all plaintiff had also to pay Rs.2,70,700/- i.e. Rs.1,41,000/- (rupees one lakh forty one thousand only) on account of ground rent and weighment charges in respect of bill of lading No. BIL/385726 and Rs.1,29,700/- (rupees one lakh twenty nine thousand seven hundred only) against bill No. BIL/102318.
4. Plaintiff has sued the defendants for recovery of the -4- Suit No. 245/98 aforesaid payments when the defendants failed to discharge their liability for payment of the aforesaid amount, despite notices.
5. Suit is contested by defendant No.2 Despite service none appeared on behalf of defendant No.1 and as such the defendant was proceeded against as ex- parte.
Defendant No.2 has contested the suit by filing written statement. Preliminary objections to the maintainability of the suit had been raised. As pleaded by the defendant, there is no privity of contract between the plaintiff and the answering defendant, and that even otherwise, plaint does not disclose any cause of action.
Another objection is that this is a case of mis-joinder of cause of action as plaintiff has sued on the basis of two bills of lading pertaining to two different transactions issued at two different ports of loading on different dates and by two different agents.
It has also been alleged that the answering defendant is agent of M/s. Pacific International Lines (Pte) Limited. The defendant admitted issuance of the two bill of lading dated -5- Suit No. 245/98 28/12/1996 and 23/01/1997 by M/s. Pacific International Lines (Pte) Limited. Case of answering defendant is that it has no nexus and contractual obligations towards the shipper or the consignee and that it is answerable only to the Principal. As further pleaded, it is the Principal, who enters into contract with the shipper at the port of loading.
In para No. 12 of the written statement, further it is case of the defendant is that the plaintiff deliberately delayed the release of containers from the ICD. Defendant is alleged to have acted on the instructions and advice of the Principal and its counterpart- defendant No.1 herein.
On these grounds, defendant has prayed for dismissal of the suit.
Plaintiff filed replication reiterating the version put forth in the plaint.
6. From pleadings of parties, following issues were framed:
(i) whether was any previty of contract between the plaintiff and the defendant as alleged by the defendant?
OPD -6- Suit No. 245/98
(ii) whether the plaintiff is entitled to recover the amount claimed by him from the defendant? OPD
(iii) If issue No.2 decided in favour of the plaintiff whether the plaintiff is entitled to recover about interest from the defendant, if so at what rate and for what period? OPP
(iv) Relief.
7. In order to prove its case, plaintiff examined PW1 Sh. Raman Gupta in part on 19/01/2005, but thereafter, examined Sh. Mrituanjay Chander Shekhar as PW1 who tendered into evidence his affidavit Ex.PW1/A and other documents.
8. On the other hand, defendant No.2 examined Sh. V. Ramanarayanan who tendered into evidence his affidavit Ex.DW1/A and document Ex.DW1/1.
9. Arguments heard. File perused.
10. Discussion
(i) All the issues are inter-connected and as such taken up together.
-7- Suit No. 245/98Plaintiff has led cogent and convincing evidence to prove payment towards ground rent and re-weighment charges. Plaintiff has proved on record payment made vide Ex.PW1/12, Ex.PW1/13 and Ex.PW1/18. As per testimony of PW1 and the documentary evidence on record, Rs.1,41,000/- (rupees one lakh forty one thousand only) were paid by the plaintiff in respect of bill of lading dated 28/12/1996 and Rs.1,29,700/- (rupees one lakh twenty nine thousand and seven hundred only) against bill No. 102318 towards bill dated 23/01/1997.
In the testimony of PW1, plaintiff has also proved that payment had to be made on account of errors / discrepancies which crept in the IGM, on account of negligence at the time of shipment of the consignment and the goods were cleared on 05/03/1997.
As per evidence led by the plaintiff, it was defendant No.2, who filed an application for amendment to the IGM No. 370 in respect of weight of the container. In this regard plaintiff has proved on record Ex.PW1/7 addressed by defendant No.2 to the Assistant Collector of Customs, Import Department, Mumbai, on 24/02/1997. Contents of Ex.PW1/7 lend corroboration to the -8- Suit No. 245/98 version of the plaintiff.
So far as removal of other discrepancies, plaintiff has proved on record letter dated 01/03/1997 Ex.PW1/8 and another letter dated 05/03/1997 Ex.PW1/9. Both these letters were sent by defendant No.2 to the Assistant Commissioner of Customs, ICD Tugalakabad, New Delhi.
Contents of letters Ex.PW1/8 and 9 also led corroboration to the version of the plaintiff that there were mistakes / discrepancies in respect of IGM No. 370 and defendant No.2 requested the Custom Authorities to allow the consignee to file the papers for suit delivery of consignment. In Ex.PW1/9, defendant No.2 clearly admitted that clerical errors were made by their counterparts load-ports and that the same were rectified.
Plaintiff has also proved on record letter Ex.PW1/11 sent by defendant No.2 wherein defendant No.2 admitted that amendments were made and brought to the notice of customs, Delhi on 27/02/1997 and 05/03/1997 vide letter No. C1612 dated 24/02/1997 and letter No. IMP/DLI/1979/1996-97 dated 05/03/1997 respectively. In view of the contents of this letter, learned counsel for the plaintiff has rightly contended that once -9- Suit No. 245/98 the plaintiff made payment of aforesaid charges plaintiff is entitled to recover the same.
(ii) Question arises as to from whom the plaintiff is entitled to recover the aforesaid amount and to what extent ?
(a) Liability under bill of lading No. DXB/NWDP 9702846 dated 23.1.1997 So far as consignment vide B/L No. DXB/NWDP 9702846 dated 23.1.1997 is concerned, Ex.PW1/6 bears rubber stamp of the office of defendant No.1. Ex.PW1/6 depicts attachments as per aforesaid Bill of Lading.
PW1 has testified that date of bill of lading was not mentioned in respect of this consignment and further that false container number and wrong weight of consignment was given. PW1 has narrated the errors in para 7 of the affidavit.
It is also in his statement that defendant No.2 filed an application for amendment in the IGM No.370. Said application is Ex.PW1/7.
Defendant No.2 submitted application Ex.PW1/14 to the Assistant Collector of Customs, Mumbai. Plaintiff has proved on record Telex message Ex.PW1/17 from defendant No.1 - Pacific -10- Suit No. 245/98 Shipping and Forwarding to defendant No.2. It is dated 04/03/2007. Vide this message, defendant No.1 asked defendant No.2 to assist the plaintiff in clearing the consignment. Defendant No.1 was also advised to explain the Custom Authorities that the typing error regarding less weight had occurred for no fault of the shipper and the consignee. As per Bill of Lading, Deira Trading and Common Est. of Amman, Jordan, was the shipper. Defendant No.1 further confirmed by this message that it shall pay all concor Rail Demurrage charges and that defendant No. 2 could debit defendant No.1 with this amount. In this way, defendant No.1 admitted its liability for this much amount and undertook to discharge the liability i.e. amount paid by the plaintiff to Custom Authorities because of delay in release of consignment. As per bill Ex.PW1/18, plaintiff had to pay Rs.1,29,700/-towards weighment charges and demurrage. This amount was demand by the plaintiff vide notice Ex.PW1/D2, but according to PW1, no such amount has been paid.
In view of the cogent and convincing evidence led by the plaintiff, it stands established that defendant No.1 was liable to pay all concor Rail Demurrage Charges paid by the plaintiff on -11- Suit No. 245/98 account of mistake on its part (on the part of defendant No.1). Defendant No.1 has not cared and dared to appear and contest the suit or the evidence led by the plaintiff. Therefore, so far as payment of Rs.1,29,700/-is concerned, only defendant No.1 is liable to discharge its liability towards the plaintiff.
(iii) Liability under Bill of Lading No. PZUBBY/96001 dated 28/12/1996 As regards, claim of Rs.1,41,000/-paid on account of ground rent and weighment charges in respect of Bill of Lading No. PZUBBY/96001 dated 28.12.96 is concerned, PW1 has testified that due to wrong IGM with customs bills of entry could not be accessed and delay of 22 days took place in clearance. In this regard, plaintiff has duly proved on record its version. It stands established from record that due to discrepancy on account of wrong mentioning of weight of the cargo in the IGM there was delay in clearance of the consignment. Vide Ex.PW1/14 defendant No.2 sought amendment by applying to the Assistant Collector of Customs, Mumbai.
Plaintiff has alleged that defendant No.2 is agent of -12- Suit No. 245/98 defendant No.1 whereas defendant No.2 has pleaded to have acted for and on behalf of its Principal M/s. Pacific International Lines (Pte) Limited and on its instructions. In this regard, reference may be made to para No. 9 of the written statement. At the same time, in para No. 12 of the written statement, defendant No.2 pleaded that defendant No.1 is counterpart of M/s. Pacific International Lines (Pte) Limited.
In his cross-examination, DW1 has admitted that there was a wrong declaration with respect to the number of container and weight, received from load port agent, and amendment was submitted by defendant No.2 at Bombay. To a specific question put to him as to who is liable for payment of demurrage charges in case of wrong declaration, DW1 replied that defendant No.2 was only an agent and demurrage charges are to be paid by the principal-Pacific International Line (Pte) Ltd. Singapore. He further admitted that defendant No.2 has not paid demurrage and detention charges in the present case. DW1 further admitted that he had issued instructions to the plaintiff to pay demurrage charges and that same will be reimbursed.
Learned counsel for defendant No.2 has referred to the -13- Suit No. 245/98 last paragraph of letter Ex.PW1/11 and argued that this is a case where defendant No.1 has no privity of contract and as such defendant No.1 is not liable to pay any amount to the plaintiff. Learned counsel further submitted that simply because defendant No.2, vide this letter assured the plaintiff to recommend to its head office, reimbursement of the concor detention charges upto 05/03/1997, it cannot be said that defendant No.1 and the plaintiff had any privity of contract. To support his contention, learned counsel has referred to provisions of Section 230 of Contract Act 1872. Learned counsel also referred to Section 32 of Customs Act, 1962 to show as to how imported goods are to be unloaded at the port of discharge.
Section 230 of Contract Act, 1872 provides that in absence of any contract to that effect, an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them. This section also provides for presumption of contract to the contrary. Such a contract shall be presumed to exist in the following cases:
(a) where the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad; -14- Suit No. 245/98
(b) where the agent does not disclose the name of his principal;
(c) where the principal, though disclosed, cannot be sued.
As noticed above, in this case, defendant No.2 asked the plaintiff to make payment assuring the plaintiff that it would recommend the case of plaintiff to its Head office for payment by way of reimbursement.
When defendant No.2 referred to its head-office, it can safely be said that defendant No.2 was referring to its Principal M/s Pacific International Lines (Pte) Limited. In view of all this, it can safely be said that defendant No.2 led the plaintiff into an honest belief in the existence of the authority.
Section 237 of Contract Act provides that when an agent has without authority, done acts or incurred obligations to third persons on behalf of his principal, the principal is bound by such acts or obligations, if he has by his words or conduct induced such third persons to believe that such acts and obligations were within the scope of the agent's authority. Section 237 has been used to fix the principal with liability for unauthorized acts of his agent. Although, plaintiff has not arrayed M/s Pacific International lines (Pte), it cannot be said that suit is not -15- Suit No. 245/98 maintainable against defendant No.2.
Even otherwise under Section 230 of Contract Act, in a case of foreign principal, agent is personally bound by contracts entered on behalf of his principal only in the cases where such a presumption can be drawn. In this case, M/s Pacific International Lines being a company registered beyond India and having place of business in India can safely be said to be a foreign principal for the purposes of Section 230. In the given facts and circumstances of this case, and defendant No.1 being Indian agent acting for the Principal can be held personally liable, when the consignments were released on 05.03.1997.
In view of the above discussion, when the goods in respect of both the consigner were got shipped by the Principal of defendant No.2, it cannot be said that this is a case of mis- joinder of cause of action. Therefore, I do not find any merit in the contention of learned counsel for defendant No.2 that defendant No.2 is not liable to pay any amount to the plaintiff.
11. Conclusion In view of the above findings, this court comes to the conclusion that plaintiff is entitled to recover a sum of -16- Suit No. 245/98 Rs.1,29,700/- from defendant No.1, with interest @ 12% per annum w.e.f. 06/07/1997, till its realisation, and Rs.1,41,000/- from defendant No.2 with interest @ 12% per annum w.e.f. 06/07/1997, till its realisation.
12. Decree sheet be prepared accordingly. File be consigned to Record Room.
Announced in open court on this 24th day of October, 2008 (Narinder Kumar) Addl.District Judge, Delhi.
24/10/2008