TaxTMI 
TaxTMI 
2020 (12) TMI 923
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....rd and high strength paper conversion products. Defendant is one of the group companies of SJA group, a freight forwarding agents. That since incorporation, plaintiffs have been exporting products to almost 36 countries and it exports consignments were handled by defendants. It is plaintiffs case that freight forwarding agent is also responsible for arranging over-seas customs clearance and inland haulage of the containers as per the order. FIRST CONSIGNMENT: 4. Plaintiffs, claim that on 27th April, 2020, core board paper weighing 2,22,334 metric ton was shipped in nine containers from factory of the plaintiffs. Port of loading was Nhava-Sheva and port of discharge was Bunder Abbas in Iran. These nine containers reached at port of destination, on 3rd May, 2020. Whereupon defendants raised two invoices nos. 17 and 18, towards ocean freight charges for Rs. 11,66,874/- and Rs. 5,900/-. However, defendants declined to release the bills of lading, on account of outstanding dues. Plaintiffs, therefore, on 22nd May, 2020, paid Rs. 8,65,000/- to the defendants. After receiving Rs. 8,65,000/-, defendants released bill of lading and issued seaway bill dated 29th April, 2020, which enab....
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....oard paper is having limited life and if goods are not taken out from the containers, same are likely to loose its utility and, therefore, it is just necessary that goods are immediately released from the port of destination. That if the goods are allowed to remain inside the container during pendency of the suit, the purpose of fling suit and seeking relief would be frustrated. Plaintiffs stated that defendants cannot take disadvantage of its own wrong and, therefore, liable to make good loss caused to plaintiffs and its customers in Iran towards demurrage and detention charges or any other charges, which the plaintiffs and consignee may have to pay to get the containers released. Under these circumstances, plaintiffs have fled suit seeking declaration that the defendants have committed breach of contract and thus, withholding bill of lading is illegal and void-ab-initio. That due to illegal and irresponsible act of withholding bill of lading from 8th May, 2020 in respect of three containers, customers have lost confidence in the plaintiffs, who have informed the plaintiffs that they will not do any business with the plaintiffs in future. Therefore, besides, seeking declaration th....
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....ents until due remuneration for the services rendered is received. 13. Thus, it appears defendants have exercised "right to retain goods" in terms of section 170 of the Indian Contract Act, 1872; and "right to appropriate" Rs. 4,35,000/- against debt, in absence of specific intimation envisaged under Section 60 of the Indian Contract Act, 1872. 14. Before appreciating rival contentions let me reproduce the provisions of Sections 60, 170 and 171 of the Indian Contract Act, 1872; "60. Application of payment where debt to be discharged is not indicated.- Where the debtor has omitted to intimate and there are no other circumstances indicating to which debt the payment is to be applied, the creditor may apply it at his discretion to any lawful debt actually due and payable to him from the debt r, whether its recovery is or is not barred by the law in force for the time being as to the limitation of suits." "170. Bailee's particular lien.- Where the bailee has, in accordance with the purpose of the bailment, rendered any service involving the exercise of labour or skill in respect of the goods bailed, he has, in the absence of a contract to the contrary, a right t....
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....20, shipment has accrued demurrage and detention charges Rs. 9,09,000/-. 19. Evidence on record shows following payments were made by the plaintiffs to the defendants from March 2020 till June, 2020; S.No. Date Amount 1. 4/3/2020 500000 2. 9/3/2020 300000 3. 13/3/2020 500000 4. 19/3/2020 500000 5. 20/3/2020 500000 6. 2/4/2020 500000 7. 7/4/2020 600000 8. 9/4/2020 100000 9. 18/5/2020 1400000 10. 22/5/2020 865000 11. 30/5/2020 435000 12. 25/6/2020 3810 13. 25/6/2020 2114 Total 6205924 Submission of the plaintiffs is that second consignment reached the port of destination on 8th May, 2020 and thereafter, plaintiffs paid Rs. 4,35,000/on 30th May, 2020 towards its freight charges whereupon defendants agreed to release the consignment. This, agreement-a circumstance is discernible from the messages exchanged between Mr. S.M. Nagar (representative of the plaintiffs. and Mr. Rajan Shah (representative of the defendants.. Thus, submitted that messages exchanged establishes the fact that defendants had agreed to release bills of lading of second ....
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....release the 3 B/L.... Rest all we can clear/ discuss....... Regards [03/06/20, 11:33:41 AM] Rajan Micro 2: Sir sorry every time we discuss. My stand is very very very clear I can not give you clean credit without having any shipment in my hand or other options you have to clear my entire out standing (which I know is not possible). Any way as you have only mentioned few days back your export shipments are starting in this week so let's wait till than. I am assuring you once new chtrs are stuff and reached the port for export we will release this B1 ALONG WITH MINIMUM PAYMENT OF 20 LACS. This are my two requirements sir. I have always supported your company and trusted & respect your commitment but we are business not exchanging services/ money on personal relationships. Hope sir you understand. You should understand despite all this we release 9cntrs B1 just to help you out(from the beginning I was not in favour and against our business policy) request you not to take too much advantage of relationship. 20. What could be gathered from these messages is that; Mr. S.M. Nagar (representative of the plaintiffs. on 28th May, 2020 requested Mr. Raja....
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....essages dated 1st and 3rd June, 2020, which I re-produce, again: "[01/06/20, 2:41:46 PM] Rajan Micro 2 : Sorry sir payment not as per our agreement you have misunderstood kindly check with bharat. [01/06/20, 2:42:06 PM] Rajan Micro 2 : will cal u after one hour [01/06/20, 2:44:07 PM] S N Nagar : Please call [02/06/20, 11:08:52 AM] S N Nagar : Good morning... I was waiting for your call... Hope you are releasing the 3 B/Ls today..... Regards [02/06/20, 11:14:53 AM] Rajan Micro 2 : Sorry sir we will not be able to do it unless we have some more payment and shipment in pipeline this our business policy from beginning. Sir I can not risk open credit with you hope you will understand. Send me your payment plan sir. Will be able to speak only after 2pm. [03/06/20, 11:03:50 AM] S N Nagar: Good morning Sir.... I await your call & update on the 3 B/L of Iran.... Kindly revert.... Regards..... Nagar [03/06/20, 11:08:44 AM] Rajan Micro 2 : Gud mrng kindly go through my yesterday msg it is very clear. [03/06/20, 11:20:04 AM] S N Nagar: Sir, requesting to release the 3 B/L.... Rest all we can clea....
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....me to the conclusion that the MPT Act does not oust the provisions of Section 171 of the Contract Act what we have now to see is whether the appellants can claim any relief or benefit under the said section. Section 171 of the Indian Contract Act, 1872, reads as follows: 171 General lien of bankers, factors, wharfingers, attorneys, and policy-brokers - Bankers, factors, wharfingers, attorneys of a High Court and policy brokers may, in the absence of a contract to the contrary, retain as a security for a general balance of account, any goods bailed to them; but no other persons have a right to retain, as a security for such balance, goods bailed to them, unless there is an express contract to that effect. This section is in two parts. The first part gives statutory right of lien to four categories only, namely, bankers, factors, wharfingers and attorneys of High Court and policy-brokers subject to their contracting out of Section 171. The second part of Section 171 applies to persons other than aforesaid fve categories and to them Section 171 does not give a statutory right of lien. It provides that they will have no right to retain as securities goods bailed to th....