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2018 (4) TMI 1954
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.... has pleaded and contended that the cause of action of the suit arose in September, 1998 upon the plaintiff coming to know of the breach of contractual obligations by the defendants. The defendants are guilty of the tort of negligence and/or guilty of wrongful conversion. In such circumstances the forum selection clause in the Bills of Lading is immaterial. 3. In the background of such claim and counter-claim, it is necessary to briefly indicate the facts narrated in the Plaint and the Written Statement. 4. In the plaint, the plaintiff has stated that the plaintiff is, inter alia, engaged in the business of manufacture and sale of hosiery goods and fabrics. The plaintiff agreed to sell 100% cotton S (J) - 308 semi combed fabric (hereinafter referred to as the "said goods") 13697.850 Kgs @ USD 3.55 per KG to DXB Knits LLC of Ajman, Dubai, UAE (hereinafter referred to as the notified party). 5. The defendant No. 1 is engaged in the business of container services shipment. The plaintiff approached the defendant No. 1 for shipment of the said goods to Dubai. The defendant No. 1 on 15th January, 1998 issued an ocean Bill of Lading being No. COK/30312/DXB signed by it as an agen....
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....ee copies of the original Bill of Lading being No. COK/30312/DXB to the plaintiff. 11. On enquiry, the plaintiff found that the defendants without the knowledge, authority and consent of the plaintiff had wrongly, illegally and in breach of the conditions of carriage dealt with the said goods and purported to deliver the same to the said overseas buyer, DXB Knits without production of the original Bill of Lading. The plaintiff was informed by the agent of the defendant No. 4, M/s. Loyal Freight International Ltd., Dubai that the said goods were delivered to the overseas buyer without production of the Bill of Lading on the express instructions of the defendants. In the alternative, the defendants have wrongfully converted the said goods, the property of the plaintiff, for their own use and have wrongfully deprived the plaintiff of the same. In the further alternative, the defendants have acted negligently and in breach of duty owed to the plaintiff. The defendants acted negligently, inter alia, in delivering or causing the said goods to be delivered without production of the Bills of Lading. 12. The said goods covered under the said Bills of Lading have been wrong....
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.... its letter dated 17th August, 1998 addressed to the defendant No. 4 with a copy to the defendant No. 1 requested the said defendant to furnish proof of the date or time of receipt of the original Bill of Lading with endorsement of the Middle East Bank, Dubai being the consignee under the said Bill of Lading. In the said letter, the plaintiff has categorically contended that if no such proof would be furnished relating to the receipt of the original Bill of Lading from the said Bank consignee, the defendants would be made liable for all costs, damage including freight. 16. The defendant No. 1 by a letter dated 22nd August, 1998 replied to the aforesaid letter in which the defendant No. 1 had acknowledged that the Singapore Office of the defendant No. 1 has received the aforesaid letter but denied its liability unless the plaintiff substantiates any monetary loss in the transaction by production of relevant Banker's Certificates. The defendants categorically stated that unless such certificate is produced, the claim of the plaintiff on the defendant No. 1 would not be valid. 17. Further the defendant No. 1 in the said letter dated 22nd August, 1998 asserted its....
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....1. The plaintiff in Paragraph 16 of the Plaint has given particulars of conversion, fraud and misrepresentation. It is stated that in issuing the said Bill of Lading, the defendant No. 1 and/or the defendants and each of them represented and/or assured that the goods would not be delivered without production of the original Bill of Lading, without intending to honour the said representation and/or assurance. The defendants induced the plaintiffs to dispatch the said goods on the said representation and/or assurance knowing fully well that the same would be delivered without the original Bill of Lading. The defendant No. 1 and the defendants released the delivery order relating to the said goods without the knowledge or information of the local agent at Dubai and suppressed the aforesaid facts from the local agent at Dubai. The defendant No. 1 and/or the defendants entered into secret negotiations and/or transactions with the said DXN Knits for delivery of the said goods without production of the Bill of Lading. The defendants have acted in breach of their duty and thereby gained advantage by misleading the plaintiff to its prejudice. The defendant Nos. 2 and 3 have set up the defen....
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.... goods from the said DXB Knits LLC, the notified party and has claimed and obtained duty draw back from the Government of India to the extent of Rs. 1,28,768/- by cheque No. 131669 dated 1st May, 1998. Under such circumstance, there is no cause of action for filing the suit against the defendant No. 1 inasmuch as no part of the cause of action has arisen within the jurisdiction of this court. The goods have been delivered by the plaintiff at Cochin and shipped to Dubai. 27. Loyal Freight is a proper and necessary party in the suit. In absence of Loyal Freight, the instant suit cannot be properly and effectively adjudicated. The suit is bad for non-joinder of necessary party. The plaintiff has also not made the consignee a party in this suit. 28. The defendant No. 1 is a Public Limited Company and the shareholding of the defendant No. 1 is owned and controlled by the public at large. The defendant No. 4 is a company registered under the laws of Singapore. The defendant No. 3 is a Director of the defendant No. 1 only with effect from July, 1999 and was not a director of defendant No. 1 at the material point of time. 29. The plaintiff has shipped 16742.75 Kg....
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....ery orders on March 9, 1998 and took the containers from the port on March 10, 1998 and returned the empty containers on March 11, 1998. The tele fax along with the reply was handed over to the clearing and custom House agents of the plaintiffs, namely, Lesslie & Lesslie at Kochi who, it appears has forwarded the same to the plaintiff at Calcutta. 32. The goods were delivered on 9th March, 1998 and the suit has been filed on November 29, 2000. The suit is barred by limitation in view of Rule 6 of Article III of the Schedule to the Indian Carriage of Goods by Sea Act, 1925 as well as Clauses (f) and (g) of Clause VI of the Standard Trading Condition printed on the reverse side of the Bills of Lading. The carriage of goods by sea is governed by the Hague Visby Rules which clearly provides that definitions and limits of liability provided for in the Rules shall apply in any action against the carrier in respect of lost or damaged goods covered by contract of carriage where the action be found in contract or in tort. 33. On the basis of the pleadings and documents disclosed on 8th June, 2016 the following issues were settled for trial: i. Does this Cour....
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....ld be governed by the law of Singapore. 40. In this context the defendants have relied upon the following decisions:- (i) ABC Laminart (P) Ltd. & Anr. v. A.P. Agencies, Salem reported in (1989) 2 SCC 163; (ii) Modi Entertainment Network v. W.S.G. Cricket PTE Ltd. reported in (2003) 4 SCC 341; (iii) Swastik gases Pvt. Ltd. v. Indian Oil Corporation Ltd. reported in (2013) 9 SCC 32; (iv) Unreported decision of the Hon'ble Delhi High Court in Gupta Pigments v. Natpar Lines (S) PTE Ltd. & Anr. in FAO No. 146 of 1999 decided on 09.12.2010. 41. Mr. Saha has referred to paragraph 2(i), paragraph 6 and paragraph 7 of the written statement and submitted that the defendant No. 1 has categorically denied that it had issued a bill of lading at Calcutta or that payment of freight was made to it by the plaintiff at 39 Kali Krishna Tagore Street, Kolkata. The contention of the plaintiff in this regard is incorrect. In any event, in view of the forum selection clause in the bill of lading, the plaintiff could not have instituted the instant suit in this Court. In an attempt to wriggle out of the forum selection clause, the plaintif....
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.... liabilities unless the suit is brought in the proper forum and written notice thereof is received by the carrier within 12 months after delivery of the goods or the date when the goods should have been delivered. 46. The said Clauses read:- "Clause "f" - Notice of loss or damage:- The carrier shall be deemed prima facie to have delivered the goods as described in this bill of lading unless notice of loss or damage to the goods indicating the general nature of such loss or damage, shall have been given in writing to the carrier or to his representative at the place of delivery before or at the time of removal of the goods into the custody of the person entitled to delivery thereof under this bill of lading or, if the loss or damage is not apparent within three consecutive days thereafter. Clause "g" - Time bar- The carrier shall be discharged of all liability unless suit is brought in the proper forum and written notice thereof received by the carrier within 12 months after delivery of the goods or the date when the goods should have been delivered." 47. The Bill of Lading is governed by the Hague Visby Rules amended by the Protocol singed at Brusse....
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..... The plaintiff received payment against the invoice value of the consignment under the BL No. COK/30313/DXB dated January 15, 1998. The witness, however, deliberately refused to depose with regard to the date of receipt of such payment. Since both the consignments have reached on February 2, 1998 and as such ought to have been taken delivery on the said date, the period of limitation for the instant suit commenced on February 2, 1998 or at least on March 7, 1998 when the consignment under BL No. COK/30313/DXB was admittedly delivered. 51. Mr. Saha submits that the plaintiff has failed to prove its case. The plaintiff's allegations that delivery of goods has been made without the Bill of Lading and that the plaintiff has not received payment for such goods has been specifically denied by the defendant Nos. 1 to 3 in paragraphs 2(v), 2(vi), 5, 8, 9, 10 and 14 of the written statement. 52. Mr. Saha submits that even if it is assumed for the sake of argument that the goods were, in fact, delivered without the Bill of Lading, the onus would still be on the plaintiff to prove that it did not receive payment for the same. This being the plaintiff's positive case....
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....ainst the plaintiff. Mr. Saha in this context has referred to the following decisions:- (a) Gopal Krishnaji Ketkar v. Mohamed Haji Latif & Ors : AIR 1968 SC 1413 (paragraph 5); (b) Swaran Singh & Ors. v. State of Punjab, : (1976)4 SCC 369 (paragraph 13); (c) Union of India v. Ibrahim Uddin & Anr. : (2012)8 SCC 148 (at paragraphs 12, 24 and 25). 55. Mr. Saha has submitted that in paragraph 9(a) of the plaint the plaintiff has alleged breach of contract. The plaintiff has also pleaded alternative cases of negligence and conversion. Notwithstanding the alternative cases pleaded by it, the plaintiff can succeed in its claim only if it succeeds in proving actual damage suffered. Injuria sine damno does not give rise to an actionable claim. The burden is on the plaintiff to prove loss or damage for non receipt of payment against goods delivered without production of the Bill of Lading as a consequence of conversion, negligence or breach of contract by the defendant. 56. It is submitted that although the plaintiff could have easily discharged its burden of proving non receipt of payment for the goods delivered, by disclosing its bal....
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....ept the documents. 61. Mr. Saha has referred to the questions being put to Mr. Chandra Prakash Poddar during cross-examination in relation to the said documents, namely, Balance sheets for the years 1998-1998, 1999-2000 and 2000-2001, Ledger accounts of the plaintiff's transactions with DXB Knits, Dubai for the years 1998-1999, 1999-2000 and 2000- 2001, Passport of Mr. Chandra Prakash Poddar, Duty Drawback Register maintained by the plaintiff, Guarantee Remittance Forms, Party Ledgers of export customers including DXB Knits, Plaint filed or the judgment passed in the Dubai suit filed by the plaintiff, Plaint in the Suit No. 496 of 1999 and submitted that although the said witness was asked to produce and disclose the said documents, the witness has refused to give any satisfactory reply for not disclosing the said documents. Mr. Saha submits that although the plaintiff is in possession of best evidence and is obliged to disclose the best evidence, the plaintiff has withheld such evidence. Mr. Saha submits that it is extremely unusual for the plaintiff for not taking any immediate steps for realization of the payments from the foreign buyer which the plaintiff alleged t....
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....8 at (paragraphs 21, 23, 27-30); 62. Mr. Saha submits that the burden of proving that the goods have been delivered without the production of the Bill of Lading and that the plaintiff has not received any payment for the goods are the positive assertions of the plaintiff which the plaintiff is required to discharge under Section 102 of the Indian Evidence Act, 1872. Moreover, the plaintiff is under an obligation to lead evidence to prove its claim. In view of failure to adduce the best possible evidence in support of a positive assertion made by the plaintiff, Mr. Saha submits that an adverse inference shall be drawn against the plaintiff. Withholding of the best evidence decreases the reliability of any other evidence that is produced and the version of the plaintiff's case needs to be disbelieved. 63. Mr. Saha in this regard has relied upon Union of India v. Ibrahim Uddin & Anr. reported in : (2012) 8 SCC 148 (paragraphs 12, 24 and 25) and Swaran Singh & Ors. v. State of Punjab reported in (1976)4 SCC 369 (paragraph 13). 64. Mr. Saha submits that the claim is frivolous and collusive. The plaintiff is in collusion with the consignee. The plaintiff ha....
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....he particular case - all of which may be inquired into either in direct examination to enhance, or in cross-examination to impeach the value of his testimony. So, all questions may be asked in cross-examination which tend to expose the errors, omissions, inconsistencies, exaggerations or improbabilities of the witness's testimony." 66. Mr. Saha has raised doubts about the authenticity of the documents produced forming Exhibit-'O'. It is submitted that in the affidavit of documents, the plaintiff has disclosed only one of the original Bills of Lading. In the plaint also a copy of only one of the original Bills of Lading was annexed. However, Exhibit - 'C', being a diary lodged by the plaintiff with the Posta Police Station, the plaintiff has stated that the original Bills of Lading and the originals of the documents of shipment alleged to have been returned to the plaintiff by the Allahabad Bank under the cover of its letter dated September 1, 1998 was lost while the plaintiff was shifting its office. The plaintiff has offered no explanation whatsoever as to how or when the original Bills of Lading were once again found or as to why although three ori....
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.... plaintiff could not establish any claim for wrongful delivery by Loyal Freight, the local agent of the defendant No. 4. 70. Mr. Saha was quite critical about the claim of the plaintiff against the defendant No. 1 on account of conversion of the goods. Mr. Saha submitted that the plaintiff's claim was a claim in tort and was as such not governed by the stipulations of limitation in either the bill of lading or in the Carriage of Goods by Sea Act is unfounded. It is first submitted that in view of the plaintiff's own case that DXB Knits and in the Middle East Bank wrongfully refused to accept the documents and to make payment in respect of the goods, there can be no question of conversion of the plaintiff's goods by the defendants. The plaintiff's first witness clearly admitted that the buyer had tendered the original Bill of Lading to the Middle East Bank. In view of such admission by the plaintiff that the original of lading had reached DXB Knits, it is only DXB Knits who could have sued for conversion of the goods covered by the bill of lading and not the plaintiff. 71. In this regard, Mr. Saha has relied upon the following decisions:- a....
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....the defendant No. 1 being either responsible or liable for the alleged non-delivery of the goods without production of the original bill of lading. Even without pleading a contract to the contrary to bring its case within the exceptions under Section 230 of the Indian Contract Act, in an attempt to get around the bar under Section 230, the plaintiff has sought to allege that the defendant No. 4 was a wholly-owned subsidiary of the defendant No. 1 and that the defendant Nos. 2 and 3 were interested in both the defendant No. 1 and the defendant No. 4. In view of the fact that the plaintiff clearly knew the connection between the defendant No. 1 and the defendant No. 4 at the time of making the shipment, and as even with such knowledge it entered into the contract with the defendant No. 1 as the agent of the defendant No. 4, such allegation is wholly irrelevant and is an attempt to mislead this Hon'ble Court. 77. The fact that the plaintiff was aware of the relationship between defendant No. 1 and the defendant No. 4 since the incipient stages of the contract, and the admitted fact that the defendant No. 1 signed the Bill of Lading not in its own name, but as an agent of ....
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....h Motors Ltd. v. Anurag Mittal, reported at : (2009) 16 SCC 274. 81. The Bill of Lading was issued and the freight was accepted by the defendant No. 1 clearly as the agent of the defendant No. 4 and not in any personal capacity. The question of lifting of corporate veil can arise only when fraud is pleaded and proved. Although there is a vague pleading of fraud in the plaint, no attempt whatsoever has been made by the plaintiff to prove the same. In view of the plaintiff's knowledge of the relationship between the defendant No. 1 and the defendant No. 4, as is, inter alia, evident from the very names of the said two defendants, there could be no question of any suppression of such fact, or of the corporate veil being lifted or pierced to uncover the same. This is only a bogey raised by the plaintiff in an attempt to deflect the main issue. It is thus submitted that that the plaintiff has no cause of action against the defendant No. 1 and the plaint filed in the suit does not disclose any. 82. Per contra, Mr. Ratnanko Banerjee, the learned Senior Counsel appearing on behalf of the plaintiff has submitted that the objection with regard to the jurisdiction of this Cour....
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.... plaintiff the sum of Rs. 37,89,000/- or any portion thereof at the office of the plaintiff at 39, Kali Krishna Tagore Road, Kolkata within the ordinary original civil jurisdiction of this Hon'ble Court. The principal of "debtor seeks creditors" clearly applies in the instant case. As such the defendant being a debtor is obliged to pay the plaintiff its credit the money due and payable to the plaintiff at the plaintiff's place of business which is within the ordinary original civil jurisdiction of this Hon'ble Court. 88. Thus, it cannot be said that this Hon'ble Court has no jurisdiction to try, determine and adjudicate the instant suit. 89. On the question of limitation, Mr. Banerjee has submitted that the Bill of Lading being No. COK/30312/DXB was issued by defendant No. 1 on 15th January, 1998. The defendant was required to transport the goods from the port of Cochin to Dubai Port by ship. The goods reached Dubai port on 2nd February, 1998. The goods were delivered to DXB Knits LLC, the notified party, by the defendants on 7th/9th March, 1998 without the original Bill of Lading being produced by the notified party. 90. This fact of deli....
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....ether. The provisions of the said clauses apply only in the event there is a loss or damage to the goods. The instant case is one of delivery of goods without the original bills of landing themselves and a case of conversion of the goods and therefore clause (f) and (g) are not applicable. In any event the time limit mentioned in clause (g) of Standard Trading Conditions is hit by Section 28 of the Contract Act, 1872, which says every agreement which limits the time within which any party may enforce his rights under any contract, by usual legal proceedings is void to that extent. 97. The instant suit has been filed well within the period of limitation of three years from the cause of action. Thus, it cannot be said that the instant suit claiming a money decree is barred by the laws of limitation. 98. Mr. Banerjee has referred to Paragraphs 23 and 24 of the Plaint and submits that the plaintiff in the said paragraphs had clearly averred and justified that the claim is not barred by limitation. Mr. Banerjee submits that the provisions of Hague Visby Rules mentioned in the Bill of Lading, has no manner of application. Mr. Banerjee has referred to Section 28 of the C....
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....d that the damage resulted from an act or omission of the servant or agent done with intent to cause damage or recklessly and with knowledge that damage would probably result." 102. As such the defence of limitation under the Hague Visby Rules is also not otherwise available to defendant No. 1. In the instant case the defendants have acted recklessly in parting with possession of the goods with the Bill of Lading. 103. Mr. Banerjee has referred to Exhibit-J being a letter dated 13th October, 1998 written by the plaintiff and submits that the said letter specially says that the goods were delivered by the representative of the defendant No. 1 at Dubai without any instruction from the plaintiff. A fax message dated 22nd August, 1998 is also attached to the said letter. The said fax message was issued by the Dubai agent of defendant No. 4 addressed to the defendant No. 1 which says about the illegal action on the part of defendant No. 1 to part with possession of the goods without Bill of Lading. 104. The defence of lack of jurisdiction the same is also not available to the defendant No. 1. The defence of the jurisdiction clause mentioned in the Bill of Lading was....
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....the year ending 31st March, 1999 and 31st March, 2004 respectively. It is submitted that the affairs of defendant No. 4 was fully controlled by defendant Nos. 1, 2 and 3. The shareholders and directors of defendant Nos. 1 and 4 are defendant Nos. 2 and 3 and/or their family members as would appear from the Exhibit 'U' and 'W' respectively. 109. The defendant No. 2 and his brother Azad Parekh were directors of both defendant Nos. 1 and 4. The defendant No. 4 was the company registered in Singapore. Plaintiff has obtained information of defendant No. 4 from the official website viz. Accounting and Corporate Regulatory Authority, (ACRA), Government of Singapore. It is evident from the Exhibit Y being the information available from the website of Government of Singapore that the status of defendant No. 4 is shown as "struck off". The date of such "struck off" was 5th July, 2007. From Exhibit Y it is also evident that the defendant Nos. 2 and 3 were the directors of defendant No. 4. The defendant No. 4 is the wholly owned subsidiary of defendant No. 1. Thus defendant No. 1 and 4 were companies owned and controlled by defendant Nos. 2 and 3 and/or their family me....
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....efendant No. 4 in Singapore to carry on its shipping business. The mere fact that the shipping carrier is shown as defendant No. 4 would not affect the liability of defendant Nos. 1, 2 and 3 for the safe keep of the goods under the Bill of Lading and for their delivery under the Bill of Lading. 111. Mr. Banerjee submits that it is a fit case where the Corporate Veil of defendant No. 1 and 4 be lifted in order to ascertain the actual controlling factor between them. The defense taken by the defendants regarding maintainability of the suit as against defendant No. 1, 2 and 3 is sham and malafide. The fact that defendant No. 4 does not exist, since the year 2007 was never brought to the notice of the Hon'ble Court by defendant No. 1. 112. There will be a failure of justice if the defendant Nos. 1, 2 and 3 are able to escape their liability in a clear case of conversion of the goods entrusted to defendant Nos. 1, 2 and 3. The plaintiff will be left remediless as defendant No. 4 cannot be sued, the same being already struck off in 2007. The fact shows that defendant Nos. 1, 2 and 3 after obtaining the goods and permitting the same to be converted are now relying on....
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....n Nos. 14, 250, 251 and 254 of examination of the first witness of the plaintiff and submits that the said evidence would show that the plaintiff has claimed damages on account of wrongful delivery of goods. The pleading as well as the evidence would show the entitlement of the plaintiff for wrongful delivery of goods. It is further submitted that the plaintiff has demonstrated entrustment of the goods to the defendant No. 1 and the defendant No. 1 as bailee has acted in a manner inconsistent with the rights of the owner of the goods, that is, delivery being affected to the notified party without the original Bill of Lading. 117. Mr. Banerjee has referred to two English decisions MOTIS EXPORTS LTD. V. DAMPSKIBSSELSKABET AF 1912 reported at 1999 (1) LLR 837 and THE STONE GEMINI reported at 1999 (2) LLR 255 and submits that in both the decisions it has been held that delivery without Bill of Lading is to be treated as case of conversion. 118. Mr. Banerjee submits that conversion has been defined in CONSOLIDATED COMPANY V. CURTIS & SON reported at 1892 (1) QBD 495 where a person without authority delivers another's goods in a manner adverse to the right of the pe....
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....ber, 2000, the conversion rate of USD to INR was Rs. 46.88 equal to Rs. 22,79,633/-. The plaintiff has claimed a sum of Rs. 22,12,000/- on account value of goods. 123. Exhibit -I is the freight certificate for Rs. 42,780/- issued by defendant No. 1. The said certificate relates to both the Bills of Lading carrying 270 cartoons (221+49). Accordingly, the proportionate freight charge for transportation of 221 cartons covered under the Bill of Leading being No. COK/30312/DXB is Rs. 35,016/-. The plaintiff as claimed a sum of Rs. 35,000/- on account of freight charge. 124. The transactions between the parties were commercial and not gratuitous. The plaintiff has not received payment of the goods covered under bill of Lading being No. COK/30312/DXB. The plaintiff has suffered loss and damages and is entitled to compensation from the defendant in view of the defendants acting in breach of contractual obligation and/or guilty of tort of negligence in respect of plaintiff's cargo in question and/or the documents of title relating thereto by handing over the cargo to the notified party without obtaining the original Bill of Lading. The original Bill of Lading remained ....
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....e in tort as bailee of the goods to ensure that the goods are not delivered without production of the original Bills of Lading, which are the documents of title. 126. Mr. Banerjee refers to Section 230(3) of the Contract Act and submits that the said provision supports the submission made on behalf of the plaintiff that such a liability in the given circumstances is to be imposed on an agent assuming that the defendant No. 1 has acted as an agent of the defendant No. 4. 127. Further, the defendant Nos. 1 and 4 are sister concerns and are owned and controlled by the defendant Nos. 2 and 3. Defendant No. 4 was the wholly owned subsidiary of defendant No. 1. This fact has been proved in evidence and there is no credible cross examination on this issue at all. The defendant has not led any evidence at all. 128. Mr. Banerjee has referred to a decision of the Hon'ble Supreme Court in Linc International v. Mandiya National Paper reported : AIR 2005 SC 1417 (Para-8) where the Hon'ble Supreme Court has held that agent would be personally liable for facilitating fraud in the matter of transaction on behalf of the principal. The particulars of fraud are spec....
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....eight, has stated that goods have been released without the production of the original Bill of Lading. The letters dated 8th September, 1998 and October 13, 1998 being Exhibit- 'H' and 'J' shows that the goods have been delivered to the consignee without the production of the original Bills of Lading. Loyal Freight has blamed Natpar Lines for breach of contract. 134. In both the letters dated 8th September, 1998 and 13th October, 1998, the plaintiff has referred extensively to the information received from Loyal Freight and held that the defendant Nos. 1 and 4 are responsible jointly and severally for delivering the consignment without production of the Bill of Lading. The letter dated 8th September, 1998 refers to a letter dated 22nd September, 1998 received from the defendant No. 1 in which the defendant No. 1 has taken a plea that unless the plaintiff is able to substantiate its claim with Banker's Certificate relating to non-payment in original, the defendant No. 1 would not admit the claim of the plaintiff. The plaintiff in its letter dated 13th October, 1998 had referred to a letter and telephonic conversation with the defendant No. 1 with regard ....
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....intiff has produced the original first, second and third copy of the Bill of Lading being COK/3012/DXB dated January 15, 1998. The said documents were marked as Exhibits-'E' & 'F' respectively without any objection. The first witness has also tendered during his evidence the legal notice dated 8th September, 1998 along with the postal receipts. The witness has also in his evidence relied upon a letter dated 13th October, 1998 signed by Mr. Pradip Kumar Todi, one of the partners of the plaintiff and has deposed that the said fax was sent by the plaintiff to the defendant No. 4 on 20th August, 1998. The witness has also identified his signature. Similarly, the said witness has also referred to the letter dated 17th August, 1998 sent to the defendant No. 4 with a copy marked each to the defendant No. 1 and Loyal Freight. The plaintiff has produced a photocopy of the letter dated 24th August, 1998 issued by the Allahabad Bank certifying that the Allahabad Bank had not received payment. The plaintiff has also disclosed a letter written by Allahabad Bank on 13th October, 1998 stating that the Middle East Bank, Dubai has returned all the documents pertaining to the Bill US....
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....ng received from the Allahabad Bank that B/L No. 30312 has been received by the Allahabad Bank from Middle East Bank but no payment has been received against the same. He has further deposed that from the agent of the defendant No. 4, namely, Loyal Freight, the plaintiff came to know from the agent of the defendant No. 4 in Dubai, Loyal Freight that the buyer had taken delivery of the goods from the shipping line and became confirmed about it when the Bill of Lading was returned to the plaintiff by Allahabad Bank. 139. The second witness of the plaintiff has deposed that the defendant No. 4 is wholly owned subsidiary of the defendant No. 1. He has produced the 12th Annual Directors' Report of defendant No. 1 with audited accounts for the year ended on 31st March, 1998. The witness has tendered the company report of the defendant No. 4 being documents issued by ACRA and the Annual Director's Report and balance sheets of the defendant No. 1 as on 31st March, 2004 along with receipt dated 17th June, 2007 and other documents forming part thereof. 140. The witness has stated that according to the last available audited balance sheets accumulated losses of defen....
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....o. 1. 142. The defendants although had filed a written statement and affidavit of documents and had the opportunity to adduce evidence in support of its case has chosen not to lead any evidence and has restricted its right only to cross-examine the plaintiff's witnesses. 143. The defendants in the written statement have raised three principal defences. 144. Firstly, the question of jurisdiction, secondly, the defendant No. 1 is merely an agent of the defendant No. 4, the foreign disclosed principal and, hence, the suit is barred under Section 230 of the Indian Contract Act, and, thirdly, the suit is barred by limitation. 145. The objection to the jurisdiction of this Court is on the basis of the jurisdiction and law clause in the Bills of Lading which reads:- "Jurisdiction and Law Clause: The contract evidenced by or contained in this bill of lading is governed by the law of Singapore and any claim or disputes arising hereunder or in connection herewith shall be determined by the Courts is Singapore and no other Courts. All business is transacted only in accordance with the Singapore Freight Forwarder's Association Stand....
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.... decide the disputes between the defendant No. 4 and the respective claimants. The series of documents disclosing the composition of the defendant No. 4 and the pattern of shareholding of the defendant No. 1 and the defendant No. 4 established beyond any doubt that the defendant No. 4 is wholly owned subsidiary of the defendant No. 1. 149. There is another interesting feature in this matter. It is significant to mention that the written statement has been filed by the defendants and not by the defendant No. 1 alone. Mr. Ram Chandra Yadav claiming to be the Accounts Officer of Natvar Parikh Industries Ltd. has affirmed the written statement on behalf of the defendants. He has categorically stated in the affidavit that he has been duly authorized by the defendant Nos. 2 to 4 to make and affirm the written statement on behalf of the defendants and he would crave leave to produce the original documents mentioned in the written statement at the time of hearing of the suit. The affidavit of documents was affirmed by one Mr. Tarak Datta on 26th April, 2011. He claimed himself to be the Executive of the defendant No. 1 and authorized by the defendant Nos. 2 and 3 to affirm the sai....
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.... ordinarily on the party who asserts the existence of a fact and wants the Court to believe in its existence. The existence of such facts if proved would entitle a plaintiff to write a judgment in its favour. Even in a proceeding where the defendant has failed to enter appearance in the suit, the Court still has discretion to direct a party to prove any fact if required. However in a situation, where the defendant has filed a written statement but subsequently its defence is struck off, the Court would ordinarily permit the defendant to cross-examine the plaintiff's witness for the limited purpose of demolishing the plaint case by demonstrating that the plaintiff has failed to prove its case on the basis of its own pleadings and evidence. 153. The right of a party to cross-examine in such circumstances has been considered in Debendra Nath Dutt v. Sm. Satyabala Dasi & Ors. reported at : AIR 1950 Cal 217. 154. In Debendra Nath Dutt (supra) a Division Bench of our Court was considering the right of a party who has not entered appearance in the suit to cross-examine the plaintiff during the hearing of the undefended suit. Their Lordships observed:- "Chapt....
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....e that, in a broad sense, the right of defence takes in, within its canvass, all aspects including the demolition of the plaintiff's case by the cross-examination of his witnesses, it would be equally correct to say that the cross-examination of the plaintiff's witnesses really constitutes a finishing touch which completes the plaintiff's case. It is a well established proposition that no oral testimony can be considered satisfactory or valid unless it is tested by cross-examination. The mere statement of the plaintiff's witnesses cannot constitute the plaintiff's evidence in the case unless and until it is tested by cross-examination. The right of the defence to cross-examine the plaintiff's witnesses can, therefore, be looked upon not as a part of its own strategy of defence but rather as a requirement without which the plaintiff's evidence cannot be acted upon. Looked at from this point of view it should be possible to take the view that, though the defence of the tenant has been struck out, there is nothing in law to preclude him from demonstrating to the court that the plaintiff's witnesses are not speaking the truth or that the evidence put for....
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....procedure, rather than substance. As pointed out by Ramendra Mohan Dutta, J. this is a matter to be sorted out in practical application rather than by laying down a hard and fast rule of exclusion. A third safeguard which we would like to impose is based on the observations of this court in Sangram Singh's case (AIR 1955 SC 425). As pointed out therein, the essence of the matter in all such cases is that the latitude that may be extended by the court to the defendant in spite of his not having filed a written statement, should not cause prejudice to the plaintiff. Where the defendant does not file a written statement or where he does not appear to contest the case the plaintiff proceeds on the basis that there is no real opposition and contents himself by letting in just enough evidence to establish a prima facie case. Therefore, the court should ensure that by permitting the defendant at a later stage either to cross-examine the witnesses or to participate in the proceeding the plaintiff is not taken by surprise or gravely prejudiced. This difficulty however can be easily overcome in practice, because there is a wide discretion with the court and it is always open to ....
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....ty; it may comprise circumstantial evidence or presumptions of law or fact." 160. Presumptions of law differ from presumptions of fact in the following respects:- (1) Presumptions of law derive their force from law, while presumptions of fact derive their force from common sense and logic. Though many of the former have intrinsic logical weight, being indeed derived from the latter, yet there are others which have none. Thus, after a person has been absent for six years 364 days there can be no presumption of death, yet the addition of one more day's absence will enable the presumption to be applied. (2) A presumption of law applies to a class the conditions of which are fixed and uniform; a presumption of fact applies to individual cases, the conditions of which are inconstant and fluctuating. Thus, the presumption of death arises whenever seven years' unexplained absence is proved; but when it is necessary to establish the time of death more precisely the question must be decided on the evidence adduced in each specific case. (3) Presumptions of law are drawn by the court, and in the absence of opposing evidence are conclusive for....
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....ementary rule in Section 101 is inflexible. In terms of Section 101, Evidence Act, 1872, ordinarily, the burden of proving the fact rests on the party who substantially asserts the affirmative of the issue and not on the party who denies it. The said rule may not be universal in its application and there may be exception thereto. 164. Under the Evidence Act there is an essential distinction between the phrase "burden of proof" as a matter of law and pleading and as a matter of adducing evidence. Under S. 101 of the Evidence Act, the burden in the former sense is upon the party who comes to court to get a decision on the existence of certain facts which he asserts. That burden is constant throughout the trial; but the burden to prove in the sense of adducing evidence shifts from time to time having regard to the evidence adduced by one party or the other or the presumption of fact or law raised in favour of one or the other. (K.S. Nanji & Co. v. Jatashankar Dossa, AIR 1961 SC 1474, 1478: (1962) 1 SCR 492) 165. There is an essential distinction between burden of proof and onus of proof. Burden of proof lies upon the person who has to prove a fact and it never shifts....
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....s at which the onus of proof shifts, and at which the tribunal will have to say that, if the case stops there, it must be decided in a particular manner. The test being such as I have stated, it is not a burden that goes on forever resting on the shoulders of the person upon whom it is first cast. As soon as he brings evidence which, until it is answered, rebuts the evidence against which he is contending, then the balance descends on the other side, and the burden rolls over until again there is evidence which once more turns the scale. That being so, the question of onus of proof is only a rule for deciding on whom the obligation of going further, if he wishes to win, rests. It is not a rule to enable the jury to decide on the value of conflicting evidence. So soon as a conflict of evidence arises it ceases to be a question of onus of proof." 170. A distinction exists between a burden of proof and proof. The right to begin follows onus probandi. It assumes importance in the early stage of a case. The question of onus of proof has greater force, where the question is, which party is to begin. Burden of proof is used in three ways: (i) to indicate the duty of bringing forward ev....
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.... in the hope of inducing the court not to draw the inference. In that sense there may be a provisional burden on the occupier raised by the state of the evidence, but that is all: it is not a legal burden, and, even if the occupier calls no evidence, at the end of the case the court must, in any event, make up its mind whether or not to draw the inference." 174. There cannot be any dispute with the proposition that the legal burden is always on the plaintiff and irrespective of any evidence being adduced by the defendants the court is required to make up its mind whether or not to draw any inference which in the instant case Mr. Saha perhaps would emphasise the non-production of ledger accounts and the balance sheets for the relevant years in relation to the overseas consignee. For the reasons I have indicated above and also discussed later I am unable to draw any adverse inference for non-production of such documents. 175. The defendants have made two positive assertions in the written statement. Firstly, that the goods have been delivered to the consignee with the consent of the plaintiff and the plaintiff, in fact, has taken the benefit of the duty drawback on ....
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....t the defendant No. 1 never agreed to compensate the plaintiff for the loss and damage suffered by reason of release of the cargo without the production of the original Bill of Lading. In the written statement, the defendants have contended that in order to help the plaintiff, the defendant No. 1 had initiated some discussion and made correspondence with Loyal Freight which is not relevant nor does it create any liability to be discharged by the defendant No. 1. 176. The very fact that the defendant No. 1 had agreed to compensate the plaintiff provided the plaintiff is able to produce Banker's Certificate to the effect that the bills have remained unpaid clearly shows that the defendant No. 1 has taken an obligation upon itself and agreed to be bound by the contract which postulates delivery only against production of the original Bill of Lading. Even if it is assumed that the defendant No. 1 could not be sued by reason of Section 230(3) of the Indian Contract Act, Section 233 of the Indian Contract Act comes to the aid of the plaintiff in establishing its right against the defendant No. 1 independently for the breach of contract. Moreover, the defendant No. 4 is no mo....
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.... without objection. It is the specific case of the plaintiff in the letters exhibited in this proceeding that defendant No. 1 had agreed to compensate the plaintiff provided the plaintiff is in a position to substantiate that the Bills have remained unpaid. On the basis of the evidence on record, the plaintiff has been able to substantiate its claim that the bills have remained unpaid. Once the original Bills of Lading were returned by Middle East Bank to Allahabad Bank, a strong presumption arises that the bills have not been paid. The Bills of Lading is the document of title to the goods. The defendants admitted that the goods were delivered without the production of the Original Bill of Lading. The defendants were in custody of the goods. The circumstances under which the goods were released are for the defendants to explain. The defendants although had stated that the goods were delivered with the consent of the plaintiff and the plaintiff had claimed duty drawback but the defendants have failed to adduce any evidence in this regard. The onus to prove these positive assertions are on the defendants. 178. Mr. Saha has laid much emphasis on the aspect of non-production o....
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....ts accessibility to the party concerned, all of which have to be taken into account. It is only when all these matters are duly considered that an adverse inference can be drawn against the party." 182. In the instant case, the plaintiff has discharged the burden of nonpayment by production of the original Bill of Lading and the Banker's Certificate certifying non-payment. The ledger accounts for the relevant years are neither relevant nor necessary to prove the claim of the plaintiff. The very fact that the original Bills of Lading were returned to the Allahabad Bank by the Middle East Bank itself raises a strong presumption that payment has not been made. All the documents along with original copies of Bills of Lading were returned to Allahabad Bank by Middle East Bank. The defendants did not dispute that goods were delivered without production of the original Bills of Lading. The defendants, however, contended that the goods were released with the consent of the plaintiff. The onus shifts on the defendants to prove this fact. Once the defendants are able to establish that the goods are released to the consignee with the consent of the plaintiff and the plaintiff has claim....
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....e defendant to establish that the goods covered by the bill of lading COK/30312/DXB were released with the consent of the plaintiff and the plaintiff has claimed duty drawback the defendants cannot escape their liability on account of conversion and liable for loss and damage suffered by the plaintiff. 185. The defendants were under an obligation not to part with the goods without production of the original Bills of Lading. The plaintiff sues the defendant for this breach. The plaintiff has also specifically alleged conversion of goods. Conversion has been pleaded in the alternative on the basis of a plea that the original Bills of Lading have been returned by the Middle East Bank to the banker of the plaintiff without remittance of fund. The plaintiff claimed that the defendants jointly and severally were under the contract is obliged to deliver goods to the consignee only on the production of the original Bills of Lading which is possible only if the consignee deposited the entire consideration amount with the Middle East Bank and thereby release the said documents from its banker so as to enable the consignee to present the original Bills of Lading to the defendants for....
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....ully denies access to it to the claimant. 188. The Act, however, cannot be "wrongful" for these purposes if done with the actual permission of the owner. 189. Intention to exercise dominion over the goods is an essential element of conversion. Anyone who deals with the goods in a manner inconsistent with the right of the true owner is prima facie guilty of conversion, provided there is an intention on the part of the person so dealing with them to negative the right of the true owner or to assert a right inconsistent therewith. A person who without authority actually delivers another's goods to a third party by way of sale or gift or otherwise in a manner adverse to the right of the person really entitled, is treated differently and is presumptively guilty of a conversion. (Martindale v. Smith (1841) 1 Q.B. 389) 190. In Mortis Exports Ltd. (supra) Justice Tamberlin by dealing with plaintiff's claim for damages for conversion observed paragraph 27: "27. Conversion has been described as an international exercise of control over goods which so seriously interferes with the right of another to control those goods that the person so acting may be re....
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....y the other party. The plaintiff may rely upon several different rights which are in the alternative, although they may be inconsistent (See. Philipps v. Philipps (1878) 4 QBD 127) but then "as to each of those he ought to set out the facts upon which he would have to rely as facts to maintain that right. (See Firm Srinivas Ram Kumar v. Mahabir Prasad reported at AIR 1951 SC 177). 193. In the instant case as observed the plaintiff has relied upon several causes of action and made necessary pleadings in support of its claim for damages on account of conversion and had throughout the trial maintained that apparent is not the real state of things in view of the fact that the defendant Nos. 1 and 4 are one and the same carrying on same business and had jointly and severally made themselves liable for performance of the contract. The burden of proof in this regard has been ably discharged by the plaintiff. The plaintiff is successful in establish loss and damage against the defendants for conversion. 194. The claim on account of damages in the instant case is assessed with reference to the duty cast upon the defendants. While the function of damages in contract is to c....
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.... to all contracts of carriage by sea, but only in cases where a bill of lading has been issued incorporating the provisions of the governed by Art. 10 of the Limitation Act for filing a suit for compensation of loss or injury occurs. If the Limitation Act of 1963 is applicable, then the suit is undisputedly in time. 16. The learned counsel placing reliance on a decision of the Supreme Court in East & West Steamship Co. v. S.K. Ramalingam, submits that Cl. 3 of Para 6 of Art. III to the Schedule of the Act is not merely a rule of limitation but a rule that provides for the extinction of the right to compensation and, therefore, the suit was not maintainable beyond the period prescribed in the rule. The Supreme Court, in that case 4, observed (at p. 1065):-- "The question we have to decide is whether in saying that the ship or the carrier will be "discharged from liability" only the remedy of the shipper or the consignee was also being terminated. It is useful to remember in this connection the international character of these rules, as has been already emphasised above, Rules of limitation are likely to vary from country to country. Provisions for exten....
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....itution of the suit, this Court may not have jurisdiction as the defendant No. 4 is the disclosed principal of the defendant No. 1 by reason of subsequent events, the said defence is no more available to the other defendants as the defendant No. 4 ceases to exists after July, 2007. A reading of the entire written statement unmistakably gives an impression that the defendants have jointly filed the written statement. It is well-settled that where an artificial division is sought to be raised by two entities to defraud a creditor the Court can always lift the corporate veil in order to find out the real wrong doers. The Court always leaned towards lifting the corporate veil where a stratagem or a device is put forward to defeat a legitimate claim of the creditor. The written statement has deliberately omitted the fact that the defendant No. 4 is the wholly owned subsidiary of the defendant No. 1 and the defendant No. 4 is no more in existence after July, 2007. 199. Under Section 230 of the Indian Contract Act, 1872 as a general rule an agent is not entitled to personally enforce nor is bound by contract entered into by him on behalf of his principle. This is, however, subject to a....
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....fendant No. 1 raised issue of jurisdiction by suppressing the fact that defendant No. 4 had ceased to exist since 2007 and for all intents and purposes the defendant No. 1, 2 and 3 are the real persons. The defendant No. 4 owes its existence to the defendant Nos. 1 to 3. It is apposite here to refer to decision of the Apex Court in reported at 1996 SC 2005 : (1997) 89 Comp Cas 362 (Delhi Development Authority v. Skipper Construction Co. P. Ltd.) which reads as follows:- "The concept of corporate entity was evolved to encourage and promote trade and commerce but not to commit illegalities or to defraud people. Where, therefore, the corporate character is employed for the purpose of committing illegality or for defrauding others, the court would ignore the corporate character and will look at the reality behind the corporate veil so as to enable it to pass appropriate orders to do justice between the parties concerned." 202. The authorities on the subject has recognised that when the corporate personality is blatantly used as a cloak for fraud as improper conduct (See Gover Modern Company Law, 4th Edition page 137), or when the notices of legal entity is used to def....