2017 (8) TMI 1028 - HC - Customs

Transport Company Wins Appeal for Recovery of Arrears and Interest

Kone Elevator India Pvt. Ltd. Versus Transport Corporation of India

The appellate Court upheld the Trial Court's judgment in favor of the plaintiff, a transport company, entitling them to recover Rs. 9,78,319/- in arrears ... Transportation of consignments to various places - freight charges - Whether the respondent/plaintiff is not entitled to recover a sum of ₹ 3,09,689/- paid towards the Customs duty at Nepal Border? - Held that: - Though the Customs duty will be payable at 5% concession rate, it is the duty of transporter to contact the customer at Kathumandu. Except the above no obligation whatsoever imposed on Transport Corporation of India. It is the specific case of the plaintiff that since all the relevant documents were not given by the appellant. The lorries were detained at check post. The transporter, in order to release the lorries detained for more than 28 days, has no other option except to pay the Customs duty from his own pocket. It is also informed to the defendant that the transporter cannot endlessly wait for the customer to pay the Customs duty. It is the duty of the consignor also. Therefore, merely because some conditions was imposed on the plaintiff in the agreement to contact the customer, it cannot be stated that the amount legally paid by the plaintiff cannot be recovered. D.W.1, in his evidence also admitted that lorries were detained at Nepal and that they have not taken any steps to release the lorries. In the absence of specific pleading with regard to the amount liable to be adjusted, merely on the basis of some admission in one of the correspondence in Ex.A11 that their engineers also issued certificate, it cannot stated that specific amount has been quantified. In the absence of any specific pleadings in that regard, and also failure to produce any evidence to substantiate the nature of the damages allegedly suffered, the amount with regard to the damages in respect of consignment during transit period, cannot be adjusted, merely on the basis of some surmise. Appeal dismissed - decided against appellant. Issues Involved:1. Entitlement of the plaintiff to recover Rs. 9,78,319/- being the arrears amount of freight charges and other expenditures.2. Entitlement of the plaintiff to subsequent interest at 12% per annum till the date of realization.3. Whether the plaintiff had not given credit for Rs. 2,00,000/- paid by the defendant.4. Entitlement of the defendant to adjust the amount towards damages.5. Entitlement of the plaintiff to recover Rs. 3,09,689/- paid towards Customs duty at Nepal Border.Detailed Analysis:Issue 1: Entitlement of the plaintiff to recover Rs. 9,78,319/-The plaintiff, a transport company, claimed that the defendant, a manufacturer of elevators, engaged their services for transporting consignments to various destinations, including Nepal. The plaintiff asserted that the defendant owed Rs. 10,88,162/- in freight charges and Rs. 27,620/- in other charges, totaling Rs. 11,14,782/-. After a payment of Rs. 2,00,000/- by the defendant, a balance of Rs. 9,14,782/- remained unpaid. The Trial Court decreed the suit in favor of the plaintiff for Rs. 9,78,319/- with interest at 6% per annum. The defendant's appeal contended that the plaintiff should not have paid the Customs duty and that the amount should be recovered from the customer. However, the Court found that the defendant failed to provide necessary documents, leading to the detention of lorries at the Nepal border, and thus, the plaintiff was justified in paying the Customs duty to release the lorries. The Court upheld the Trial Court's judgment, confirming the plaintiff's entitlement to recover the amount.Issue 2: Entitlement of the plaintiff to subsequent interest at 12% per annumThe plaintiff claimed interest at 12% per annum on the arrears amount. The Trial Court awarded interest at 6% per annum from the date of the plaint till the date of realization. The appellate Court did not find any grounds to alter this decision, thereby confirming the interest rate awarded by the Trial Court.Issue 3: Whether the plaintiff had not given credit for Rs. 2,00,000/- paid by the defendantThe defendant argued that the plaintiff did not account for a payment of Rs. 2,00,000/- made on 23-11-1999. The plaintiff's suit amount already considered this payment, and the Trial Court's judgment reflected this adjustment. The appellate Court found no evidence to suggest otherwise, thereby confirming that the plaintiff had given due credit for the payment.Issue 4: Entitlement of the defendant to adjust the amount towards damagesThe defendant claimed that the consignments were damaged during transit and unloading, and the cost of these damages should be deducted from the plaintiff's claim. The Court noted that while the defendant mentioned damages, they failed to provide specific details or evidence regarding the nature and value of the damages in their written statement. Consequently, the Court ruled that the defendant could not adjust the claimed amount for damages against the plaintiff's bills due to the lack of specific pleadings and evidence.Issue 5: Entitlement of the plaintiff to recover Rs. 3,09,689/- paid towards Customs duty at Nepal BorderThe plaintiff paid Rs. 3,09,689/- to the Nepal Customs to release the detained lorries, arguing that the defendant failed to provide necessary documents. The defendant contended that the plaintiff should have contacted the customer to pay the Customs duty as per their agreement. However, the Court found that the plaintiff had informed the defendant about the detention and requested them to clear the Customs duty. The defendant did not take any steps to resolve the issue, forcing the plaintiff to pay the duty to release the lorries. The Court held that the plaintiff was entitled to recover this amount from the defendant, as the payment was made to mitigate further losses due to prolonged detention.Conclusion:The appellate Court dismissed the defendant's appeal and confirmed the Trial Court's judgment. The plaintiff was entitled to recover Rs. 9,78,319/- with interest at 6% per annum, and the defendant's claims for adjustments and non-recovery of Customs duty were rejected due to insufficient evidence and failure to fulfill contractual obligations.