TaxTMI 
TaxTMI 
2022 (9) TMI 1355
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....erly known as Allcargo Movers (India) Pvt. Ltd.), is a company incorporated under the Companies Act, 1956. Respondent no.2 M/s. Walford Meadows Ltd. (defendant no.4) was the agent of defendant nos.1 to 3. The plaintiff asserted that defendant nos.1 to 3 are interrelated/sister companies and/or belong to and/or managed by the same group of companies. 4. In or about July, 1996, the plaintiff entered into contracts with M/s. Universal Apparel (EPZ) Ltd. Kenya ("M/s. Universal") for the sale of Cotton Knitted fabrics and other allied accessories valued US$ 98,715.29. The plaintiff entrusted the goods to defendant nos.1 to 3 for carriage and delivery, from the Port of Bombay to Mombassa. Defendant no.3 issued six Bills of Lading. Each of those six Bills of Lading were made out, "TO ORDER" signifying that the delivery of the six consignments shipped thereunder was to be given only upon production and surrender of the original Bills of Lading to the defendants. 5. The ships carrying the consignments arrived at the Port of Mombassa. The plaintiff learnt that, in breach of express condition of the delivery of the consignments only upon production of the original Bills of Lading, two consi....
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....s. Hence, the plaintiff was constrained to institute the suit for the value of the goods along with interest at the rate of 24% p.a. which became payable, after 90 days from the date of the invoice. 8. M/s. Walford, defendant no.4, did not appear despite service. Hence, the suit proceeded ex parte against defendant no.4. 9. Defendant nos.1 and 2 resisted the suit by filing written statement. At the outset the tenability of the suit was assailed on the ground of misjoinder of the parties on the premise that ACE Lines, defendant no.1, was not a legal entity and just a trade name of defendant no.2. Defendant nos.1 and 2 categorically denied that defendant nos.1 to 3 are interrelated/sister companies and/or belong to and/or managed by the same group of companies. Secondly, it was contended that the Civil Court at Bombay had no territorial jurisdiction to entertain, try and decide the suit qua defendant nos.1 and 2, who were not residing and/or carrying on business within the jurisdiction of the Court. Nor any part of the cause of action accrued within the territorial limits of the Court at Bombay. Thirdly, it was contended that the plaintiff was put to notice by defendant no.3 as ear....
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....ded that being an agent of the disclosed principal, defendant no.3 was entrusted with the task of shipping goods at the Mumbai Port. Defendant no.3 had performed the said obligation by duly shipping the goods at Mumbai Port and also specifically instructing the agent of defendant no.2, at the port of discharge, to deliver the consignments only upon the production of original Bills of Lading. Therefore, there was no breach of any contractual or statutory duty on the part of defendant no.3. 13. On the basis of the aforesaid rival pleadings, issues were settled by the City Civil Court. In order to substantiate his case, the plaintiff examined Badarmal Modiram Jain (PW-1) and tendered documents including the Bills of Lading and the copies of the correspondence exchanged between the plaintiff and defendants, inter se, and with M/s. Universal the consignee. In the rebuttal defendant no.3 examined Rajan Randhive (DW-1), the Assistant General Manager of defendant no.3. A number of documents were also tendered on behalf of the defendants. 14. After appraisal of the oral evidence and the documents tendered for his perusal, the learned Judge, City Civil Court, was persuaded to partly decree....
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....ity, condition, contents and the value of the goods were unknown to the carrier'. According to Mr. Shah, the learned Judge misdirected himself in construing the communication addressed by defendant no.3 to the consignee M/s. Universal that on the basis of the claim of the plaintiff, defendant no.3 had debited a sum of US$ 82,353.31 to the account of the consignee. Since there was neither proof of the value of the goods nor anything to indicate that defendant no.3 had debited the said amount in the account of M/s. Universal, the learned Judge could not have answered the said issue in favour of the plaintiff. 19. Mr. Shah further submitted that the trial Court grossly erred in not appreciating the jural relationship between defendant no.3 and defendant no.2, on one part, and defendant no.2 and defendant no.4, on the other part. It was all along the case of defendant no.3 that it was an agent of the disclosed principal. In this view of the matter, even if the case of the plaintiff is taken at par that there was wrongful delivery of the goods by the agent of defendant no.2, at the port of discharge, defendant no.3 could not have been fastened with any liability. 20. By the impugned j....
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....me defendant no.3 raised any dispute about the fact that defendant no.3 acted in the capacity of the agent of defendant no.3. On the contrary, there are documents wherein not only defendant no.3 had acknowledged defendant no.4 to be its agent at Mombassa, but even the latter conceded that defendant no.3 was its principal. With a view to extricate itself from the liability, the defendant no.3 has taken a palpably false defence that defendant no.4 was the agent of defendant no.2 and defendant no.3 had no concern with defendant no.4. The said stand defence is clearly belied by the evidence, urged Ms. Thakkar. 24. The endeavour of the defendants to assail the decree on the ground that value of the goods has not been independently proved, according to Ms. Thakkar, also does not merit countenance for reasons more than one. First, there is no material to show that the defendants ever contested the value of the goods, till the written statement came to be filed. Second, defendant no.3 claimed to have debited the account of defendant no.4 with the sum of US$ 84,000, which the plaintiff had claimed from defendant no.3. 25. Ms. Thakkar further submitted that the challenge to the impugned de....
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....nsequences and the effect of the subsequent events, which allegedly occurred. 29. To retain emphasis and narrow down the controversy, it may be expedient to extract the contents of letter dated 19th September, 1996, Exhibit-E-2 addressed by defendant no.4 to the consignee. With reference to the four original Bills of Lading, under which the goods were consigned, defendant no.4 wrote as under; "The above shipment were released and delivered to you without your surrendering to us the original bills of lading. The procedure of the through bills of lading or house bills of lading are that no cargo should be released to the importer without presentation of the original bills of lading. However, this favour was extended to you because:1, You are our regular customer 2. To save you from heavy port storage charges which you would have incurred if you were to wait until you got the original bill from your supplier. 3. You needed the material very urgently as you were out of stock. We have now been adviced by our Principals Allcargo that your supplier MAHAVIR APPAREALS is demanding US Dollers 84,353.31 from us as we releansed the goods in absence of the original B/L. [ILLBGIBLE]....
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....COPY OF THE SAME, NOTE THIS IS VERY SERIOUS CASE AND WE REQUEST FOR YOUR IMMEDIATE REPLY. ALSO THE SHIPPER HAS PUT A CLAIM OF USD 84,353.31 WHICH WILL BE FORWARDED TO YOU IN CASE THE CARGO HAS BEEN DELIVERED W/O THE ORIGINAL B/L OR PROCEDURES IN ABSENCE OF THE SAME." 33. The aforesaid communication, in turn, was in response to the letter dated 14th September, 1996 (Exhibit-C3) addressed by the plaintiff to the defendant. The following contents of the said letter bear upon the controversy at hand. "THIS IS IN CONTINUATION OF OUR LETTER DTD 13TH SEPTEMBER, 1996, WE WOULD LIKE TO INFORM YOU THAT THE TOTAL AMOUNT INVOLVED IN RESPECT OF FOLLOWING BILL OF LADING AMOUNTING TO USD 84,353.31 (APPX RS.29,87,795/- B/L DATE VESSEL VOY INV DT AMOUNT USD BOM/B-6/302179 09/07/96 CMBT TANA 24/111 MA 07/96 04/07/96 19721.12 BOM/B-6/302506 26/07/96 KILIMANJR O 1/113 MA 22/96 22/07/96 11731.46 BOM/B-6/302683 08/08/96 ORBIT 5/116 MA 14/96 31/07/96 13452.12 --DD-- MA 13/96 31/07/96 1750.00 BOM/B-6/302816 14/08/96 ORBIT 5/116 MA 18/96 08/08/96 15994.73 BOM/B-6/303093 28/08/96 CMBT TANA 25/119 MA 23/96 24/08/96 21723.88 T....
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....was debited with the said sum of US$ 84,353.31 has not been proved independently. I am afraid to accede to this submission. The fact that immediately after the claim was lodged by the plaintiff defendant nos.3 and 4, went on to claim the amount from the person, whom they held liable, detracts materially from the defence now sought to be raised. Undoubtedly, the Bills of Lading contain a disclaimer as regards the quantity, contents and value of the goods consigned. However, the plaintiff's claim is not rested on the value of goods mentioned on the Bills of Lading only. Post disclosure of wrongful delivery of the goods, the plaintiff instantaneously alleged and firmly claimed damages commensurating with the value of the goods, as assessed by the plaintiff. In this view of the matter, the defendants cannot seek to draw any mileage from the fact that there is no evidence aliunde to establish the value of the goods. From this stand point, in my view, the learned Judge, City Civil Court committed no error in returning an affirmative finding in favour of the plaintiff. Point No.2 : 39. The principal plank of the challenge to the impugned decree was that defendant no.3 being an agent of ....
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....The real issue that comes to the fore is whether the situation at hand is governed by the provisions contained in Section 230 of the Act in the context of the juridical status of defendant no.3 qua defendant no.4. Whether defendant nos.3 and 4 were simply co-agents of defendant no.2 or the jurial relationship between defendant nos.3 and 4 transcended the status of independent co-agents, is the moot question for consideration. 44. Mr. Shah, endeavoured to impress upon the Court that Bills of Lading unequivocally disclose the status of defendant no.3 as an agent of the named principal i.e. defendant no.2. With this disclosure, the wrongful delivery of the goods by defendant no.4 could not have been made a foundation for the liability of defendant no.3, was the thrust of the submission of Mr. Shah. 45. Ms. Thakkar submitted that the material on record clearly shows that defendant no.4 was in fact the agent of defendant no.3. Attention of the Court was invited to the contents of the afore-extracted documents and further correspondence between the defendants inter se and with M/s. Universal. It is imperative to note, in the letter dated 13th September, 1996 addressed to M/s. Harilal B....
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....ich the defendant - Rajendra Randhive (DW-1) fared in cross-examination on the aspect of the inter se relationship between defendant nos.2 and 3. Mr. Randhive (DW-1) conceded in the cross-examination that the written statement on behalf of defendant nos.1 and 2 is signed by Mr. Sashikiran Shetty. He conceded in unequivocal terms that Mr. Shetty is the Director of Allcargo Movers, defendant no.3. To a pointed question as to who were the other directors of defendant no.3, Mr. Randhive (DW-1), replied that, to his knowledge, only Mr. Shetty was the Director of defendant no.3. He feigned ignorance as to whether there were any common directors of defendant nos.2 and 3. It would be relevant to note that Mr. Randhive (DW-1) conceded that Mr. Shetty was (then) still working with defendant no.3 and was also available in Mumbai. 49. Defendant nos.1 to 3 chose not to examine Mr. Shetty. If the evidence of Mr. Randhive (DW-1) is to be believed, Mr. Shetty, who signed and verified the written statement on behalf of the defendant nos.1 and 2 was the Director of defendant no.3 and controlled the affairs of defendant no.3. This factor cannot be said to be immaterial or inconsequential. If the con....
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....consider what is the exact scope of the two forms of action, viz., action for wrongful conversion and action for wrongful detention, otherwise known as action in trover and action in detinue. A conversion is an act of willful interference, without lawful justification, with any chattel in a manner inconsistent with the right of another, whereby that other is deprived of the use and possession of it. If a carrier or other bailee wrongfully and mistakenly delivers the chattel to the wrong person or refuses to deliver it to the right person, he can be sued as for a conversion. Every person is guilty of a conversion, who without lawful justification deprives a person of his goods by delivering them to some one else so as to change the possession. (Salmond on Torts, 11th Edition, pages 323, 324, 330). 16. The action of detinue is based upon a wrongful detention of the plaintiff's chattel by the defendant, evidenced by a refusal to deliver it upon demand and the redress claimed is not damages for the wrong but the return of the chattel or its value. If a bailee unlawfully or negligently loses or parts with possession he cannot get rid of his contractual liability to restore the bai....
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.... All that is necessary is that the act should have been committed by the agent in the course of his employment, although the principal did not authorise, or justify, or participate in the act or even if he forbade it or disapproved of it. The liability of the principal for the wrongs of his agent is a joint and several liability with the agent. The injured party may sue either or both of them." We respectfully agree with the observations quoted hereinabove." (emphasis supplied) 54. In the aforesaid view of the matter, I am not inclined to accede to the submission on behalf of the appellant that it could not have been fastened with the liability for the wrongful delivery of the goods by defendant no.4 as defendant no.3 was an agent of the disclosed principal. Point No.3: 55. The challenge to the impugned decree based on failure on the part of the plaintiff to mitigate the loss, in strict sense, does not emerge from the facts of the case and evidence adduced by the parties. Edifice of this submission was sought to be built on the alleged rejection of the goods by M/s. Universal, the consignee. It was sought to be urged on behalf of defendant no.3 that after M/s. Universal addre....
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....o the party who is in breach of the contract but it is a concept that has to be borne in mind by the Court while awarding damages. The correct statement of law in this behalf is to be found in Halsbury's Laws of England (4th Edn.) Vol. 12, para 1193 at page 477 which runs thus: "1193. Plaintiff's duty to mitigate loss. The plaintiff must take all reasonable steps to mitigate the loss which he has sustained consequent upon the defendant's wrong, and, if he fails to do so, he cannot claim damages for any such loss which he ought reasonably to have avoided." Again, in para 1194 at page 478 the following statement occurs under the heading 'Standard of conduct required of the plaintiff: "The plaintiff is only required to act reasonably, and whether he has done so is a question of fact in the circumstances of each particular case, and not a question of law. He must act not only in his own interests but also in the interests of the defendant and keep down the damages, so far as it is reasonable and proper, by acting reasonably in the matter In cases of breach of contract the plaintiff is under no obligation to do anything other than in the ordinary course of business....