TaxTMI 
TaxTMI 
2026 (7) TMI 1857
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....efendant nos. 1 to 4 32 to 43 c) Counter claim 44 to 52 d) Written statements of defendant nos. 5 and 6 53 to 54 e) Written submissions of Appellant no. 2 55 to 65 3) Issues framed by the Trial Court and summary of findings 66 4) Oral Evidence 67 to 75 5) Orders passed by the Trial Court and orders in appeals 76 to 82 6) Submissions of appellants-defendants 83 to 100 7) Submissions of the respondent-plaintiff 101 to 144 8) Points for Determination 145 9) Reasons Analysis of points for determination and findings 1) Points for Determination no. 1 to 4 146 to 168 2) Point for Determination No. 5 169 to 172 3) Point for Determination no. 6 173 to 204 4) Points for Determination No. 7 and 8 205 to 210 5) Point for Determination no. 9 211 to 219 6) Point for Determination No. 10 220 to 222 7) Point for Determination no. 11 223 to 230 10) Conclusion 231 to 236 1) Introduction 1. Heard learned advocate Mr. C.B. Upadhyaya for the appellants and learned advocate Mr. Abhijit Joshi for the respective respondent. 2. These matters are cross appeals and for ....
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....stic sales in India. 8. The defendant nos. 2, 3 and 4 are brothers who were carrying on the business of export of various items in the name and style of "House of Dubary" -defendant no. 1. Defendant nos.2, 3 and 4 are also the partners of defendant no. 1 firm as averred in the plaint. Defendant No. 5 M/s. Airfreight (P) Ltd. is a company registered under the Companies Act and carrying out its business at Mumbai as Clearing and Forwarding Agent. Defendant no. 6-New Bank of India is a Scheduled Bank situated at Delhi and had issued Irrevocable Letters of Credit (LCs) in favour of the plaintiff at the request and on account of defendant no. 1-firm. 9. The plaintiff filed Special Civil Suit No. 120 of 1979 to recover a sum of Rs. 62,91,245.18 from the defendants jointly and severally. 10. It is averred in the plaint that in December, 1977, 6 Yugoslavian buyers were brought by defendant no. 2 at the factory of the plaintiff for negotiation regarding export of electronic goods to Yugoslavia. Thereafter, pursuant to further negotiation at Bombay, Delhi and Hongkong, defendant nos. 1 to 4 agreed to act as Export House and placed orders in their own name for reason of expediency su....
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....Free Trade Zone to Bombay. 16. Aggregate value of the third consignment is US$ 4,30,510.14 equivalent to Rs. 34,65,606.60. 17. As the defendants did not pay the amount of second and third consignment, the plaintiff filed the suit on 21.05.1979 for recovery of Rs. 62,91,245.18 together with interest at the rate of 15% from 17.12.1978 to 05.05.1979 and running interest at the rate of 15% per annum till realisation. 18. It is the case of the plaintiff that after the plaintiff exported the first consignment from Kandla by ship to Yugoslavia through the Clearing and Forwarding Agent M/s. Dawn India, defendant nos. 1 to 4 persuaded the plaintiff to export the goods by air through defendant No. 5 as defendant No. 5 was giving 30 days credit for payment of freight to defendant nos. 1 to 4 as the goods were to be exported on FOB basis. 19. The plaintiff agreed to the suggestion to export the goods by air through defendant No. 5 - M/s. Airfreight (P) Ltd. who was Clearing and Forwarding agent of defendant nos. 1 to 4 from Bombay airport to Greece airport. Accordingly, plaintiff sent the second consignment after removing the goods from Kandla Free Trade Zone under Form A.R.4 issue....
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....nt no. 6 received Letters of Credit drawn in its favour by the bankers of Yugoslavian buyers i.e. "Manufacturer Hanover Trust", a leading American Bank of International repute. Defendant no. 6-New Bank of India had drawn LCs in favour of the plaintiff and was expected to honour the LCs and pay the amount thereof to the plaintiff on production of bank draft and the documents to the defendant no. 6 through negotiating bank i.e. State Bank of India at Kandla. 24. It is the case of the plaintiff that though defendant no. 6 being in full knowledge of true facts and after having received the original Airway Bill showing the name of the plaintiff in the column of shippers, should not have paid the entire amount received from the bankers of Yugoslavian buyers to defendant no. 1. The plaintiff has therefore, alleged that defendant nos. 1 to 4 as well as defendant no. 6 New Bank of India are liable to pay the amount covered by LCs drawn by defendant no. 6 in favour of the plaintiff insofar as the value of the second consignment exported by defendant No. 5 to the Yugoslavian buyers through Air on 27.12.1978 amounting to US $ 2,60,863=00 equivalent to Rs.20,99,947.01. 25. It is the case ....
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....he defendant No. 5 is called upon to return cargo under AR-12 to 20 along with relevant documents. By letter dated 24.04.1979, the plaintiff informed the Assistant Collector of Custom,Kandla Free Trade Zone giving details of AR-4 Form from AR-12 to 20 regarding the third consignment that the goods have been sent to defendant No. 5 but the same were not exported till that date and further steps are required to take back the goods from the defendant No. 5. 31. The Assistant Collector of Customs Kandla Free Trade Zone by letter dated 03.05.1979 also informed the defendant No. 5 that goods are kept in an unauthorised manner for a period of more than four months since the goods were under customs export bonds and threatened the defendant No. 5 for action under the provisions of the Customs Act and called upon defendant No. 5 to deliver the consignments back to the plaintiff since the goods were not exported and the plaintiff being the owner of the goods did not wish to export the goods and intended to bring them back to Kandla Free Trade Zone. The customs authorities also warned defendant No. 5 for holding the bonded goods illegally. However, in spite of such communication from the p....
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....0 of the Code of Civil Procedure, 1908, place of suing shall be where the defendants actually and voluntarily reside and carry on the business and work for gain or where the cause of action wholly or in part arose and therefore, the Court at Kuchchh at Bhuj has no territorial jurisdiction as negotiation between the parties took place only at three places i.e. Bombay, Delhi and Hongkong. 37. It was also contended that plaintiff has no locus standi to institute the suit on his own volition or free will at Bhuj as the plaintiff has failed to show as to how defendant nos. 5 and 6 could be impleaded as party. 38. It was also contended that though it is an admitted position that amount of Rs.26,80,327.50 pertaining to first consignment has already been received by the plaintiff then how that amount can be again claimed by the plaintiff. 39. It was further contended on behalf of defendant nos. 1 to 4 that the plaintiff is not entitled to claim any amount as LCs have expired on 30.12.1978. It was also contended that the terms and conditions of LCs was contract between the parties and in absence of any LCs, defendants are not liable to pay any amount to the plaintiff. 40. It was....
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....kong, M/s. Hanspa Knit(P) Ltd., Shree Hasmukh C Khatri, Shree P.U.Oza, Shree A.C. Pota and State Bank of India, Kandla Free Trade Zone, Gandhidham-Kutch were joined as defendant nos. 1 to 6 respectively. 45. In para No. 5 of the counter claim, it was averred that various irrevocable Letters of Credit opened in their favour by a Government Enterprise "SOLUN" Import-Export, Gevgelija, Yugoslavia of US$ 2,284,465.00 equivalent to Rs.2,27,31,800/-. It is further averred that Hasmukh Brothers (HK) assured and agreed to assemble the items as per the order in factories located in Hongkong and accordingly, irrevocable Letters of Credit dated 20.06.1978 and 21.06.1978 in favour of the said firm were opened and in turn Letters of Credit were opened by the defendant no. 1 firm "House of Dubary" as stated in para no. 9 of the counter claim. However, Hasmukh Brothers (HK) failed to supply the goods but assured to execute the orders under the said Letters of Credit through sister concern plaintiff M/s. Hanspa Knit (P) Ltd. located at Kandla. 46. It is further averred that upon assurance given by the plaintiff M/s. Hanspa Knit (P) Ltd., 7 Letters of Credit in favour of Hasmukh Brothers (HK)....
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....Credit for about Rs. 82 Lacs issued by Yugoslavian buyers in the name of its sister concern Dubary Exports sustaining heavy loss of Rs. 22 Lacs. 51. It was therefore, prayed that Suit no. 120 of 1979 should be dismissed and counter claim of Rs.1,08,85,152 together with interest at the rate of 18% per annum should be decreed. The declaratory suit filed before Delhi High Court is placed on record at Exh. 442. 52. The plaintiff also filed the written statement to the counter claim denying the facts stated therein and reiterated the facts stated in the plaint and also denied that M/s. Hasmukh Brothers (HK) has any connection with the 2nd and 3rd consignment which were admittedly exported for which payment has been received from the Yugoslavian buyers. The other defendants in the counter claim also filed their written statement denying the claim made in the counter claim. d) Written statements of defendant nos. 5 and 6 53. Defendant No. 5 filed its reply at Exh.35 wherein similar contention has been raised as raised by defendant nos. 1 to 4. 54. Defendant no. 6 also filed its written statement at Exh.38 contending that draft drawn by the plaintiff on defendant no. 1 was s....
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....et Singh reported in (2002) 5 SCC 377. ii) State Bank of Travancore v. Kingston Computers reported in (2011) 11 SCC 524. iii) A.R. Antulay v. R.S. Nayak reported in (1988) 2 SCC 602. 59. It was alleged that advocates appearing for the plaintiff were not authorised. It was also pointed out that in 2019, a statement was made before the Court that appellant no. 2 - defendant no. 2 Shakar Darbari had expired which was a false statement and thereafter on an application being filed on 20.12.2024, vide order dated 09.07.2025, the abatement order was recalled, resulting into deprivation of right to access justice for six years which constitute a grave violation of Article 21 of the Constitution of India. 60. Reference was also made to the background of the appellants-defendants and the respondent-plaintiff vis-a-vis national character of the family of "House of Dubary" and the plaintiff company and its Director. 61. Thereafter reference is made to medical emergency of Shakar Darbari aged 76 years who was diagnosed with pancreatic cancer and had undergone major surgical procedure lasting for 10 hours and requires immediate access to funds for continuous treatment.....
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....he Appellant No. 2 contending similar averments, these submissions are not required to be dealt with as the appeal filed by the defendant nos. 1 to 4 was heard at length and is hereby decided considering submissions made by the learned advocates of both the sides. 3) Issues framed by the Trial Court and summary of findings 66. The Trial Court framed following issues at Exh. 218 and findings on the issues are also recorded in para no. 48 of the judgment which are summarised as under: Issue No. ISSUES FINDINGS 1) Whether the def. Nos. 1 to 4 prove that the plaintiff Hanspa Knit (P) Ltd., has been committed the breach of contract ? If so, they are entitled to recover the amount as claimed in the counter claim ? In the negative 2) Whether the plaintiff M/s. Hanspa Knit (P) Ltd., is entitled to all or any reliefs on basis of the allegations as made in the plaint? Yes. As per order 2-(A) Whether this court has jurisdiction to entertain the suit of the plaintiff Hanspa (P) Ltd., against the defts.? In the affirmative (2-B) Whether it is proved that the deft.Nos. 5 & 6 of the suit are not necessary or proper parties and that the suit is bad? ....
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.... 4 at Exh.334 to Exh. 336. Order of penalty dated 02.01.1981 passed by Special Officer of the Customs Department upon defendant nos. 1 to 4 at Exh. 337. Telex Message of defendant nos. 1 to 4 accepting the mistake and agreement for payment at Exh.338. Copies of communication between the plaintiff and defendant No. 5 is produced at Exh. 339 to 348. Copy of communication between customs officer and defendant No. 5 at Exh. 349. Telex message from the defendants at Exh.350. Freight bill of spare part sent by the plaintiff to Yugoslavian buyer regarding 2nd and 3rd consignment at Exh.352. Details of letter dated 26.10.1978 of the defendants having agreed to extend the period for delivery of goods received by the plaintiff on 17.12.1978 at Exh.353. Telex messages between the parties from 12.12.1978 to 30.04.1979 at Exh.354 to 368. Letter written by Customs authority to defendant No. 5 at Exh. 369. 70. In the cross examination and re-examination, witness of the plaintiff denied that the plaintiff was liable to pay the airfreight. It was also denied that due to financial crisis, defendant nos. 1 to 4 paid the airfreight. 71. The witness of the plaintiff also placed on record letter d....
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..... The plaintiff M/s Hanspa Knit (P) Ltd., Kandla, Gandhidham Kachchh is entitled to recover the sum of Rs. 49,81,336-00 (Rupees forty nine lac, eighty one thousand three hundred thirty six only.) from the defendant Nos. 1 to 4 with running interest at rate of twelve per cent per annum from the date of the suit till realization. It is therefore ordered that the defendant Nos. 1 to 4 shall pay the amount of Rs. 49,81,33 with running interest at rate of twelve percent per annum from the date of the suit till date of the payment to the plaintiff. The rest of the claim and that suit against the defendant Nos. 5 & 6 stand to be dismissed. It is hereby ordered that the defendant Nos. 1 to 4 are restrained to take money from standing sundry account in New Bank of India Ltd., D-47 Defence Colony., New Delhi and be directed to be deposited the entire amount lying in such sundary account of New Bank of India Ltd., New Delhi, in the court for payment and satisfaction of the decree passed against them in Special Civil Suit No. 120 of 1979. It is further ordered that the sixth defendant New Bank of India Ltd., D-47, Defence Colony, New Delhi is prohib....
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....k for a period as may be specified by the Court. It was also prayed to direct the New Bank of India, to transfer Rs. 30 Lacs standing in the Fixed Deposit account of the defendant nos. 1 to 4 together with interest or in the alternative to issue injunction against the bank from operating and/or withdrawing any amount from the Fixed Deposit account. 81. This Court (Coram: Hon'ble Mr. Justice I.C. Bhatt and Hon'ble Mr. Justice J.P. Desai, As their Lordships were then) by order dated 23.09.1988 directed to deposit the amount received by the Additional Registrar with the Bank of Baroda, Navrangpura branch, Ahmedabad for a period of three months which was renewed from time to time. 82. It is reported that as per the latest status report obtained from State Bank of India, GHCC Branch, Sola, if fixed deposit is encashed prematurely, the payment amount will be about Rs.7,14,70,627/- approximately [(P)1,91,04,323/- + (I)5,23,66,304/-) 6) Submissions of appellants-defendants 83. Learned advocate Mr. C.B. Upadhyaya on behalf of the appellants- original defendant nos. 1 to 4 submitted that the Trial Court lacked territorial jurisdiction under section 20 of the Code of Civil Procedu....
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....edly, the Letters of Credit were opened in Delhi and therefore, the place of contract was Delhi and not Kandla and the Trial Court's conclusion that the place of contract was Kandla is erroneous and misconceived. 85. It was submitted that before the first shipment was made on 27.11.1978, the Letters of Credit (which were the only terms of the contract between the parties) were amended and modified on 09.10.1978, 14.10.1978, 20.10.1978, and 18.11.1978, all of which were communicated to the Plaintiff with sufficient knowledge. Therefore, the letter dated 18.11.1978 at Exh.205 written by the Plaintiff, which the Trial Court relied upon as the 'acceptance', was written after the contract had already been concluded through the Letters of credit and therefore, reliance on this letter to determine the place of contract is, therefore, legally untenable. 86. Learned advocate Mr. Upadhyaya for the appellants- defendant nos. 1 to 4 submitted that place of performance of the contract was Bombay and not Kandla and the finding of the Trial Court that the place of delivery of goods was Kandla, relying upon Sections 36 and 39 of the Sale of Goods Act, 1930 is erroneous as the Letters of ....
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.... 90. Learned advocate Mr. Upadhyaya for the appellants-defendants submitted that, the cause of action, in its entirety, arose in Delhi (contract formation and payment) and Bombay (performance). Therefore, the Trial Court at Bhuj had no jurisdiction whatsoever to entertain the suit and therefore, the entire proceedings are void and the decree is a nullity. 91. In support of his submission, reliance was placed on the following decisions: 1) Bhagwandas Goverdhandas Kedia v. Girdharilal parshottamdas & Co. reported in AIR 1966 SC 543. 2) A.b.C. Laminart Pvt. Ltd. v. A.P. Agencies reported in AIR 1989 SC 1239. 3) Union of India v. Ladulal Jain reported in AIR 1963 SC 1681. 4) Patel Roadways ltd. v. Prasad Trading Co. reported in AIR 1991 SC 1514. 92. Learned advocate Mr. Upadhyaya for the appellants-defendants submitted that the Trial Court erred in holding that the contract was independent of the Letters of Credit. It was submitted that the Letters of Credit are individual contracts independent of the terms and conditions of the underlying contract of sale. However, in the present case, the only terms and conditions of the contract which have....
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....is in the nature of a defensive claim arising from the same transaction, and the spirit of the exception should be applied. Learned advocate Mr. Upadhyaya for the appellants-defendants submitted that the Trial Court's interpretation is inconsistent as the Plaintiff sued the Appellant-firm as a legal entity under Order XXX of the CPC and the Trial Court passed a decree against the firm and its partners, however, it is legally untenable to recognize the firm for the purpose of being sued but to de-recognize it for the purpose of its own claim in the very same suit. It was submitted that if the firm can be a defendant, it can also be a claimant in a counter-claim. It was further submitted that, the right to defend a suit is a fundamental right and to deny the appellants-defendants the right to prosecute their counter-claim, which arises from the very same transaction and is intrinsically linked to the Plaintiff's claim, amounts to denying them an effective right to defend. It was submitted that the bar under Section 69 of the Partnership Act was not intended to be used as a sword by the Plaintiff to unjustly enrich itself. It was submitted that though the Trial Court relied up....
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....arding agent from M/s. Dawn India (its own agent) to Defendant No. 5-M/s. Airfreight (P) Ltd.(the appellants' agent) without the defendants' consent and the plaintiff also failed to ensure that the goods were exported in compliance with the terms of the Letters of Credit. It was therefore, submitted that the appellants-defendants were under no obligation to accept or pay for goods shipped in violation of the fundamental terms of the contract hence, the Trial Court's finding that the appellants-defendants were liable, tantamount to creating a new contract for the parties, which is impermissible in law. 97. Learned advocate Mr. Upadhyaya for the appellants-defendants submitted that the Trial Court has erred in holding that the defendants committed fraud by submitting forged airway bills and exporting goods in their own name as this finding is not supported by the evidence on record. It was submitted that Section 17 of the Indian Contract Act, 1872, defines 'fraud' as the suggestion as to a fact of that which is not true by one who does not believe it to be true, the active concealment of a fact by one having knowledge or belief of the fact, a promise made without any i....
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....eged that the appellants - Defendant nos. 1 to 4 were jointly and severally liable along with the clearing agent -Defendant 5 and the New Bank of India -Defendant 6. It was submitted that the Trial Court could not have exonerated defendant nos. 5 and 6 from any liability in its findings. It was submitted that there is a logical and legal contradiction because when the agents through whom the alleged fraud or breach was committed are not liable, the principal cannot be held liable on the same cause of action and therefore, the findings of the Trial Court are not tenable on this issue. 100. Learned advocate Mr. Upadhyaya therefore, prayed to quash and set aside the impugned Judgment and Decree dated 31.01.1986 and dismiss the Civil Suit No. 120 of 1979 filed by the original plaintiff- respondent no. 1 as being without jurisdiction and without merits. It was also prayed to allow the counter claim filed by the appellants-defendants and pass a decree in their favour. In the alternative, it was prayed to reduce the decreed amount to the extent of legitimate claims and set-offs of the appellants-defendants. 7) Submissions of the respondent-plaintiff 101. Learned advocate Mr. Abhi....
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.... Bombay. It was submitted that there were preliminary negotiations at Bombay, Delhi and Hongkong and then the Letters of Credit were opened and orders were placed by the defendants and these orders were accepted by the plaintiff at Kandla. It was submitted that this would show that the acceptance of the offer was made at Kandla. It was submitted that this being so, it is clear that the cause of action had arisen at Kandla and therefore, Court at Bhuj would also have jurisdiction to entertain the suit filed by the plaintiff. 103. Learned advocate Mr. Joshi for the respondent no. 1 submitted that the suit is based upon the breach of the contract for recovery of the price of the second and the third consignments from the defendants Nos. 1 to 4. It was submitted that the suit is based on two counts, first, the breach of contract and second, the damage resulting from the tort have been mentioned in the plaint. It was submitted that admittedly, the goods of third consignment were sent from Kandla to Bombay for the purpose of the export to the defendant No. 5, through M/s. Vijay Transport Co. therefore, the Civil Judge (S.D.) at Bhuj would have jurisdiction to try and decide the suit o....
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....f the orders is produced at Ex.282. It was submitted that the said witness has also stated that the Yugoslavian buyers were supposed to open the Letters of Credit in favour of the defendant No. 1, in the Bank of Defendant No. 1 i.e. New Bank of India, New Delhi -Defendant No. 6. It was further deposed that out of those seven orders, relating to the Letters of Credit, the defendant No. 1 opened four letters of credit in favour of the plaintiff's bank - i.e. State Bank of India, Kandla which are produced at Exh.290 to Exh.309, along with other papers. It was also deposed that the goods relating to the second and third consignments were supplied through the defendant No. 5 and the defendant No. 5 was supposed to send the Airway bills for the second and third consignments to the plaintiff, however, the defendant No. 5 did not send those Airway bills and sent to defendants Nos. 1 to 4. It is also stated in the deposition that the defendants Nos. 1 to 4 had then submitted those Airway bills directly to the defendant No. 6 New Bank of India, New Delhi and the Airway bills were forged and goods were exported on the basis of the fabricated documents. It was also submitted that, the cust....
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....n F.O.B. basis and therefore, there was no question to pay the airfreight by the respondent-plaintiff for the second and third consignments. It was therefore, submitted that the respondent-plaintiff was not liable to pay airfreight when goods were handed over to the defendant No. 5, for the purpose of the export as the carriers. 106. It was further submitted that the goods relating to third consignment were sent through M/s. Vijay Transport Co., Gandhidham, via Truck bearing registration No. GTY 3883 from Kandla to Bombay on 9.12.1978 showing plaintiff as "Consignor" in goods consignment note and showing the name of M/s. Dawn India as consignee and therefore, M/s. Dawn India as the representative of the plaintiff handed over the goods to the defendant No. 5, on 27.12.1978 for the purpose of exporting those goods to Yugoslavian buyers. It was submitted that the defendant No. 5 was the carrier and the plaintiff was the owner of the goods and the goods were handed over for shipment, subject to the payment of airfreight by the defendant No. 1 and the goods were to be exported to Yugoslavia via Athens (Greece) on behalf of the plaintiff. 107. It was submitted that the plaintiff wr....
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....ff demanded back the possession of the goods from the defendants Nos. 1 to 5 in terms of the letter at Exh.369, however, subsequently on 4.5.1979, the said goods were exported and delivered to Yugoslavian buyers. 110. It was also submitted that the defendant No. 6 i.e. New Bank of India was also liable to make the payments of the second and third consignments under the Letters of Credit on receipt of the actual amounts from the Bank of the Yugoslavian buyers, however, the defendant No. 6 failed to do so and supported the defendant No. 1, in releasing the payment in personal account of the defendant No. 1, which is nothing but collusive fraud on the part of the defendants. It was submitted that the Yugoslavian buyers opened seven irrevocable Letters of Credit towards the payments of the goods as the photocopies of such Letters of Credit are produced at Exh. 283 to Exh.289, however, in turn, the defendant No. 6 - New Bank of India opened four Letters of Credit in favour of the plaintiff in the State Bank of India, Branch office Kandla. It was submitted that the photocopies of such Letters of Credit along with the documents produced at Exh. 290 to Exh.309 clearly shows that the def....
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....ned seven Letters of Credit in the name and in favour of M/s. Hasmukh Brothers (HK), Hongkong as per at Exh. 374 to Exh.380 on 4.9.1978,however, M/s. Hasmukh Brothers (HK) Ltd., was unable to perform the entire contract work, hence as per mutual consent of all the parties, it was decided to open three Letters of Credit in the name and in favour of M/s. Hasmukh Brothers (HK), Hongkong and four Letters of Credit to be opened in the name and in favour of the respondent/plaintiff - i.e. M/s. Hanspa Knit (P) Ltd., therefore, the Letters of Credit at Exh. 381, Exh.383 and Exh.386 were opened in name and in favour of M/s. Hasmukh Brothers (HK) on 5.10.1978 and four Letters of Credit at Exh.290, Exh.295, Exh.300 and Exh.305 were opened in the name and in favour of the plaintiff. 112. It was further submitted that it was not possible to supply the entire goods of the orders, within specified time and therefore, the plaintiff requested to extend the time limit up to 20.12.1978 for the shipment and such time limit was extended by the letter at Exh. 253 dated 26.10.1978, accordingly, the plaintiff supplied the goods in three parts on 22.11.1978, 25.11.1978 and on 12.12.1978 relating to the ....
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....as claimed in the suit, referred to deposition of Mr. Deepak Darbari on behalf of the defendants Nos. 1 to 4, at Exh. 415 wherein he has admitted that Mr. Deepak Darbari was the partner in year the 1978 but retired from the partnership as a partner, and it was admitted that the partnership firm is being registered for the purpose of the Income Tax and not registered under the Partnership Act. It was alleged that the plaintiff failed to supply the goods relating to second and third consignments within stipulated time limit and defendants have not renewed the Letters of Credit either in favour of the plaintiff or in favour of M/s. Hashmukh Brothers (HK) to submit that Deepak Darbari has falsely contended the appellants/original defendants has not intimated the respondent/plaintiff to send the goods of second and third consignments and not made any fresh contract thereof and did not give any consent even after sending the goods of second and third consignment and that the defendant No. 1 has paid the freight, insurance premium and borne the expenses of handling the goods for the second and third consignments and also paid the demurrage of the goods. It was therefore, submitted that ex....
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....an buyers and kept in its own account of the partnership firm, hence it was submitted that the entire correspondence as well as the oral evidence on the record leave no doubt that the plaintiff was ready and willing to act as per the terms of the contract and accordingly acted upon it also. It was submitted that oral evidences of the witness Deepak Darbari is self-contradictory against the correspondence which took place between the parties to the contract, therefore, the defendants Nos. 1 to 4 only with a view to avoid their liabilities got up such defense, evidence and arguments which is nothing but an afterthought. 118. It was therefore submitted that the learned Trial Court has rightly come to the conclusion that the defendants Nos. 1 to 4 committed default in making payments, and it is also quite clear that the defendant No. 1, was not having any grievance about the delay in performance of the contract when it was agreed with the consultant of the Yugoslavian buyers to extend the time limits of the contract and that extension was made voluntarily. It was submitted that the defendants agreed to take the delivery of goods of the second and third consignments even after the ex....
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....be entitled to institute any suit or in form of the Counter Claim or the cross suit to enforce the right arising from the contract. It was therefore submitted that the effect of the Section 69 is that the suit by the unregistered firm is bad in law and not tenable at its inception as Section 69 does not confer any right and debars the unregistered firm from filing the suit. 124. It was submitted that once the Court is satisfied that the firm is not registered, the Court must treat the suit or cross-suit as if it has not been filed and Court should proceed to dismiss it and in the present case the firm namely, "House of Dubary" is not registered under the provisions of the Indian Partnership Act then the counter claim by way of the cross suit is not maintainable. It was therefore submitted that the learned Trial Court has rightly rejected the Counter Claim of the defendants. 125. Learned advocate Mr. Joshi for the respondent no. 1 submitted that the liability for the freight, insurance etc. relating to the second and third consignments is of the defendant No. 1 firm because the firm took the delivery of the goods at Bombay through their agent defendant No. 5, however, the defe....
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....531/1986. 128. Learned advocate Mr. Joshi for the plaintiff raised preliminary objection regarding the maintainability of appeal. It was submitted that the appeal filed by the appellants (original defendant nos. 1 to 4) is not maintainable as per Section 69 of the Partnership Act, more particularly, the provisions of Section 69(2) of the Partnership Act, 1932 which is as under:- "Section 69(2) - No suit to enforce a right arising from a contract shall be institute in any Court by or on behalf of a firm against any third party, unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm." 129. It was submitted that in the present case it is categorically admitted by Deepak Dubari in his deposition (Exh-415) and also admitted in his cross examination that the partnership firm namely, "House of Dubary" defendant No. 1 is not a registered partnership firm. It was submitted that the learned Trial Court has rightly come to the conclusion in Para No. 110 of the Judgment. It was therefore submitted that in view of aforesaid factual matrix as well as provisions of law, the present Appeal filed by the appellants h....
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....its of the jurisdiction of one Court and the defendant resides, or carries on business, or personally works for gain, within the local limits of the jurisdiction of another Court, the suit may be instituted at the option of the plaintiff in either of the said Courts." 133. It was submitted that the aforesaid provision itself provides an option to the plaintiff to institute the suit in either of the Courts. It was further submitted that the making of a contract is part of cause of action, and performance of a contract is also a part of cause of action, hence a suit in respect of the breach can always be filed at the place where the contract was made or it should have performed or where its performance is completed. Not only that, even part of cause of action arises where money is expressly or impliedly payable under the contract. In support of the aforesaid submission, reliance was placed on the judgment of the Hon'ble Apex Court, in the matter of A.B.C. Laminart Pvt. Ltd. and Ors. Versus A.P. Agencies, Salem, MANU/SC/0001/1989. Therefore the learned Trial Court has rightly decided the issue No. 2-A in affirmative on the point of jurisdiction. 134. With regard to the appli....
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....y from M/s. SOLUN during the pendency of the suit, moreover, the Statement of Account of the appellants-defendants with their Banker i.e. Defendant No. 6, are produced at Exh.386 to Exh.393 which it is important piece of evidence about the payments received by the appellants-defendants from the Yugoslavian buyers. Learned advocate for the plaintiff referred to and relied upon the Written Statement of the defendant No. 6 at Exh.38 and more particularly, in Para No. 11, the Defendant No. 6 wherein it was categorically admitted and stated on oath as under: - "The answering Defendant is not aware of the circumstances under which the first Defendant came in possession of the Airway Bill which he handed over to the answering Defendant along with his Drafts drawn on his foreign buyers, for purpose of collection of their Draft amounts by the answering Defendant. The Defendant No. 1 had submitted his drafts for US $ 1,09,960/-, US $ 1,02,820/ and US $ 1,00,000/- drawn in his foreign buyers along with necessary documents including the Airway Bill No. 098-2561-9996 in which the name of House of Dubary appeared as one of the shippers. Answering Defendant forwarded the same on 27/12/78....
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....hi with regard to the contention of the appellants-defendants that the learned trial Judge has wrongly come to the conclusion and committed a grave error by imposing liability of Freight, Insurance etc. on the appellants-defendants submitted that, as a matter of fact, the liability of Freight, Insurance etc. is not at all imposed upon the appellants-defendants, on the contrary on bare perusal of the observations made by the learned trial Judge in Para Nos. 137, 139 of the Judgment, it proves that the total amount of Rs. 7,22,446-00 towards Freight, Insurance etc. is disallowed by the learned trial Judge and the said amount is deducted from the total claim of Rs.62,91,245-00. It was further submitted that since the learned trial Judge has disallowed the amount of Rs. 7,22,446-00, therefore in the Cross Appeal No. 1093/1987, the appellant of the said Appeal has raised one of the grounds in Para No. 4, as under: - "(4): That the learned Judge seriously erred in deducting Rs. 1,91,646/ and Rs. 5,30,800/- by way of freight charges from the price of the goods defendants Nos. 1 to 4 were held liable and to which amount the plaintiffs were held entitled to realize from the said de....
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....unt in this Court for the payment and satisfaction of the decree..." 144. It was further submitted that in view of the above, the amount which is lying with the Registry of this Court may please be directed to pay the said amount with accrued interest to the Office of the Respondent No. 1 i.e. Official Liquidator, so that the respondent No. 1-Official Liquidator can settle the dues of the workers as well as of the secured and unsecured creditors of the Company in Liquidation as per the provisions of the Companies Act, 1956 accordingly dismiss the First Appeal No. 531/1986. 8) Points for Determination 145. Considering the submissions of both the sides and oral and documentary evidence on record, following points for determination: 1) Whether the Trial Court has committed an error in assumption of jurisdiction to entertain the suit under section 20 of the Code of Civil Procedure, 1908? 2) Whether the place of contract formation is Delhi or Kandla? 3) Whether the place of performance of contract was at Bombay or Kandla? 4) Whether the place of payment was Delhi or Kandla? 5) Whether the appellants defendants were in breach of contr....
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.... 300, 305 7. 09.10.1978 The defendant no. 6 Bank amended Letters of Credit by extending the shipment date to 01.12.1978 and last date of negotiation of documents was extended to 30.12.1978. - 8. 14.10.1978 As per the negotiations between the parties, it was agreed that the shipment would be sent by Air from Bombay Airport for export of the goods to Yugoslavia and accordingly the Letters of Credit were amended. - 9. 26.10.1978 Letter of the defendant no. 1 firm to extend the period of Letters to Credit to complete the delivery of the goods. 353 10. 18.11.1978 Letter of the Plaintiff for acceptance of the order placed by the defendant no. 1 firm on 04.10.1978 282 11. October - November 1978 The plaintiff shipped the first consignment of goods through its clearing agent M/s. Dawn India for value of US$ 3,33,285.60 equivalent to Rs. 26,80,327.50. The payment for the first consignment was received by plaintiff and there is no legal dispute regarding the first consignment. - 12. 04.12.1978 Telex message of Hasmukh brothers to pay airfreight by defendant no. 1 fir....
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....were retained for approximately 5 months at the request of the defendant no. 1 firm. 316 & 317 28. 21.05.1979 Special Civil Suit No. 120 of 1979 was filed before the Civil Judge (S.D.), Bhuj by the plaintiff claiming Rs. 62,91,245.18. 3 29. 24.05.1979 Defendant no. 1 firm filed the counter-claim for Rs. 1,08,85,152/- for damages and reimbursement of expenses from the plaintiff. 105 30. 12.06.1979 Special Investigation and Intelligence Branch of Bombay Customs issued show-cause notice under section 108 of the Customs Act, 1962 upon the defendant no.1 firm. 334 31. 19.06.1979 Yugoslavian buyers informed the defendant no. 1 by letter requesting the confirmation regarding deduction of 2% for the defective goods. 417 32. 26.06.1979 Appointment of commissioner to take inventory of the account of defendant no.1 from the books of defendant no.6. 41 33. 26.06.1979 Defendant no.1 to 4 were restrained from realizing any consideration of third consignment received from the Yugoslavian buyers. 42 34. 22.08.1979 Payment intimation from Yugoslavia buyers to the defendant no.1 firm. 418 35. ....
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.... recovery of immovable property with or without rent or profits, (b) for the partition of immovable property, (c) for foreclosure, sale or redemption in the case of a mortgage of or charge upon immovable property, (d) for the determination of any other right to or interest in immovable property, (e) for compensation for wrong to immovable property, (f) for the recovery of movable property actually under distraint or attachment, shall be instituted in the Court within the local limits of whose jurisdiction the property is situate: Provided that a suit to obtain relief respecting, or compensation for wrong to, immovable property held by or on behalf of the defendant may, where the relief sought can be entirely obtained through his personal obedience, be instituted either in the Court within the local limits of whose jurisdiction the property is situate, or in the Court within the local limits of whose jurisdiction the defendant actually and voluntarily resides, or carries on business, or personally works for gain. Explanation.-In this section "property" means property situate in [India.] SECTION 19 : Suits for co....
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....ble time. (3) Where the goods at the time of sale are in the possession of a third person, there is no delivery by seller to buyer unless and until such third person acknowledges to the buyer that he holds the goods on his behalf: Provided that nothing in this section shall affect the operation of the issue or transfer of any document of title to goods. (4) Demand or tender of delivery may be treated as ineffectual unless made at a reasonable hour. What is a reasonable hour is a question of fact. (5) Unless otherwise agreed, the expenses of and incidental to putting the goods into a deliverable state shall be borne by the seller. SECTION 39 : Delivery to carrier or wharfinger (1) Where, in pursuance of a contract of sale the seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer, or delivery of the goods to a wharfinger for safe custody, is prima facie deemed to be a delivery of the goods to the buyer. (2) Unless otherwise authorised by the buyer, the seller shall make such contract with the carrier or wh....
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....enforceable by law becomes void when it ceases to be enforceable. SECTION 3 :Communication, acceptance and revocation of proposals. The communication of proposals, the acceptance of proposals, and the revocation of proposals and acceptances, respectively, are deemed to be made by any act or omission of the party proposing, accepting or revoking, by which he intends to communicate such proposal, acceptance or revocation, or which has the effect of communicating it. SECTION 4 : Communication when complete. The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made. The communication of an acceptance is complete,- as against the proposer, when it is put in a course of transmission to him, so as to be out of the power of the acceptor; as against the acceptor, when it comes to the knowledge of the proposer. The communication of a revocation is complete,- as against the person who makes it, when it is put into a course of transmission to the person to whom it is made, so as to be out of the power of the person who makes it; as against the person to whom it is ....
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.... the contract, it was agreed between the parties to enter into contract for supply of the goods by the plaintiff who is sister concern of M/s. Hasmukh Brothers (HK) and three Letters of Credit were confirmed in favour of M/s. Hasmukh Brothers (HK) on 05.10.1978 and remaining four Letters of Credit were confirmed in favour of the plaintiff vide Exhs. 290, 295, 300 and 305 and on opening of such four Letters of Credit in favour of the plaintiff through State Bank of India, Kandla, four orders were placed by defendant no. 1 with the plaintiff vide letters dated 04.10.1978 Exh. 278 to Exh. 281 taking confirmation from the plaintiff. It is also not in dispute that after placing four orders, defendant no. 2 had come to Kandla and discussed regarding shipment and on basis of such discussion, the plaintiff vide letter dated 18-19.11.1978 confirmed four orders. It is, therefore, a clear part performance of the contract at Kandla as contract was finally concluded on accepting the orders by the plaintiff at Kandla, Gandhidham-Kutch. Therefore, reliance placed by the defendants only on Letters of Credit for contending that other circumstances and facts are to be ignored and only terms and cond....
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....ade then the suit on the contract is required to be filed at the said place however, in a contract of sale of goods, the place where the goods have to be delivered, is also the place of performance and the Court of that place would have jurisdiction to entertain the suit in respect of the dispute of the contractual rights of the plaintiff. 158. In the facts of the case, from perusal of the Letters of Credit at Exh. 290 to 309, it appears that it was initial contract that the goods were shipped from Kandla to Greece accompanied by all necessary documents as mentioned therein. However, parties subsequently agreed to permit the shipment by Air from Bombay to Yugoslavia and such arrangement was made for the purpose of expedient delivery to the buyer. 159. From the correspondence between the parties, it is evident that place of shipment is from Kutch and the performance of the contract was to be made at Kandla, Kutch. Therefore, it is not in dispute that cause of action or part of cause of action had taken place at Kandla which is material for the plaintiff to prove to succeed. The plaintiff has therefore, rightly been held to have proved that originally contract between the parti....
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....immovable property, a plot admeasuring 264 sq. mtrs. in the Residential Colony - DLF Qutub Enclave Complex, Gurgaon. It is not in dispute by and between the parties that the property is situate in Haryana. It is no doubt true that the defendants are having their head office at Delhi. It is also true that the agreement was entered into between the parties at Delhi. It also cannot be denied that the payment was to be made at Delhi and some installments were also paid at Delhi. The pertinent and material question, however, is in which court a suit for specific performance of agreement relating to immovable property would lie- 15. Now, Ss. 15 to 20 of the Code contain detailed provisions relating to jurisdiction of courts. They regulate forum for institution of suits. They deal with the matters of domestic concern and provide for the multitude of suits which can be brought in different courts. Section 15 requires the suitor to institute a suit in the court of the lowest grade competent to try it. Section 16 enacts that the suits for recovery of immovable property, or for partition of immovable property, or for foreclosure, sale or redemption of mortgage property, or for determ....
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....he contract. In the facts of the case, admittedly price consideration was payable at Kandla as per the stipulation in Letters of Credit stating that State Bank of India, Kandla to receive the payment and in fact, for first consignment the payment has been received at Kandla. Section 36 of the Sale of Goods Act clearly lays down that in absence of contract to the contrary, goods sold are to be delivered at the place at which they are at the time of sale read with section 32 of the said Act which lays down that unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions. Therefore, in the facts of the case when the terms of the contract is and was that price of the goods should have been paid to the plaintiff's bank at Kandla and as such, place of payment was at Kandla and not at Bombay, therefore, even on this count, considering the place of payment would confer jurisdiction to the Court to entertain the suit. 163. In view of the facts emerging from the record, the part cause of action has arisen at Kandla being place of performance and place of payment, because the plaintiff has accepted the contract at Kandla, performed the contract by disp....
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....he contention of the defendants that only terms and conditions of the contract were the terms and conditions of the Letters of Credit and therefore, the Trial Court would not have any jurisdiction. Such a contention raised on behalf of the plaintiff is nothing but an effort to consider the entire issue in a truncated manner by only referring to the Letters of Credit ignoring the vital fact that goods have been dispatched from Kandla through carrier of the plaintiff to the clearing and forwarding agent at Bombay for export by Air. Therefore, it cannot be said that the goods were not dispatched from Kandla taking into consideration the provisions of section 39(1) of the Sale of Goods Act which is relied upon by the Trial Court only to show that there was a part performance of the contract at Kandla. 168. The contention of the defendants that when the goods were dispatched for second and third consignment, Letters of Credit had expired is also not tenable in view of the fact that the plaintiff had participated in execution of the export of second consignment and third consignment dispatched by the plaintiff and further the contention of the defendants cannot be accepted considering....
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.... the said money for their own use otherwise not restrained by the order of the injunction of the court. The learned advocate for the defts., has submitted that the light in which the matter shall be considered is different. It is contended that the sequence of writing the name in Air way bill was not given the right to the first deft., but the first deft., was exporter of the goods to Yugoslavian Buyer in terms of the contract and was entitled to recover the money from the buyer through Bank to Bank and received the money accordingly and nothing more. It is therefore contended that there was no consequential effect resulted to damage or injury to the plaintiff. On the other hand, it is submitted on the part of the plaintiff that the term "cause of action" is much wider and for the present purpose, it shall be understood to mean the bundle of facts constituting the cause of effect in resulting the damage for the tortious act. I am inclined to take the view that the fact of the deprivation of the property would be one of the bundle of the facts which is necessary to be proved in order to entitled the plaintiff to file the suit against the defts., Apart from this in determining whethe....
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....ance of customs in AR-4 form. It was further understood in the negotiations that the goods would be transported under requisite transfer permits and AR-4 forms under the provisions of the Customs Act by road to the clearing and forwarding agent at Bombay and that the goods would be exported by the clearing and forwarding agent from Bombay to Yugoslavia via Athen (Greece) in name of the plaintiff. It has further set up in the plaint that under such terms and conditions of the contract and understanding between the parties, the Yugoslavian buyers had opened the letters of credit in favour of the first defendant House of Dubary and then the deft., Nos. 1 to 4 in their turn opened the letter of credit in favour of the plaintiff through their Bankers i.e., the deft., No. 6 New Bank of India Limited, New Delhi Therefore the deft. No. 6 is the opening Bank. It has further set up the facts in the plaint that the New Bank of India, New Delhi has been opened the four letters of credit on 5-10-78 in favour of the plaintiff as described more particularly in paragraph No. 6 of the plaint. According to those letters of credit, the goods were to be shifted not later than 10-10-78 and bills would ....
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....ed value of Indian rupees to paise. The plaintiff has already received the said amount in respect of the first consignment through sixth deft. New Bank of India, New Delhi for and on behalf of the first deft. These goods were expected to be exported by ship however, by letter dated 14-10-78, the letters of credit were amended and permitted shipment by Air from Bombay Airport to THEOSSALONIKI (Greece) Air port and Air way bill was to be made to the order of " "Makosped" SKOPJE Notify Solun (DVGELAJA) Yugoslavia. Further by letter dated 27-11-78, the sixth deft., had amended the letter dated 14-10-78 so as to read "shipment by Air from Bombay Airport to Athens Airport (Greece) permitted one original and two copies of the air way bill made out to the order of Makosped Skopje Notify Solun (DGELALJA) Yugoslavia marked freight prepaid would require. It has further set up the facts that the deft. Nos. 2 to 4 had persuaded and prevailed upon the plaintiff for further shipment by Air to be made through the fifth deft., as the clearing and Forwarding Agents which would provide the 30 days facility for the payment of freight even though the representatives of the plaintiff were hesitating to ....
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....d of M/s. Hanspa Knit (P) Ltd., House of Dubary Kandla Free Trade Zone, Gandhidham Kachchh, New Delhi India,. It is therefore alleged that the fifth deft., could not have mentioned in the column of "shipper" the House of Dubary, New Delhi "At the most, in view of the letters of credit the fifth deft., could have mentioned after the name of the plaintiff House of Dubary and not to be described House of Dubary as the shipper at all. It has further set up the case in the plaint that the fifth deft., knew that the goods were forwarded by the plaintiff from Kandla Free Trade Zone which were exempted from Custom duty only if the exporter of the goods would be within Free Trade Zone, Kandla." 171. From the above findings of facts on analysis of evidence done by the Trial Court, we do not find any infirmity in the same and therefore, no interference is called for in the findings arrived at by the Trial Court that the defendants had committed breach of contract. The contention raised on behalf of the appellants-defendants that the plaintiff dispatched the second and third consignment after Letters of Credit had expired without any contractual basis and the plaintiff changed the clearing ....
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.... in favour of the plaintiff (Exh.290 to Exh.309). 175. On perusal of these documents which are exhibited before the Trial Court as per the deposition of the witness of the plaintiff, heavy reliance is placed on behalf of the advocate of the defendants that the terms and conditions mentioned in Letters of Credit would govern the terms of the contract regarding the shipment of goods by the plaintiffs. On perusal of each of the Letters of Credit at Exh.290 to Exh.309 only relevant condition is regarding the date of Letters of Credit stated as 10.10.1978 which was subsequently extended by mutual consent of both the sides. Another condition which is referred to and heavily relied upon by the defendants is with regard to shipment by air from Bombay Airport to Greece Airport was permitted by amending the original Letter of Credit as per letter dated 14.10.1978 (Exh.303) so far as Letter of Credit No. 13/1978 and 14/1978 was concerned which are relevant for second and third consignment. It appears that rest of the Letters of Credit were not amended. So far as first consignment is concerned, shipment was made from Kandla port by extending the date of shipment upto 01.12.1978 for submissi....
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....iff has deposed that defendant No. 5 has forwarded freight bills to defendant no. 1 instead of the plaintiff and before the plaintiff can submit the bills before the bank, defendant no. 1 had already encashed Letters of Credit opened by the Yugoslavian buyers. 181. At this stage, it is pertinent to note that during the pendency of the suit, interim order was passed to keep the money received by the defendant no. 6 bank in Sundry account and accordingly amount of Rs.33,82,509.08 on 06.09.1979 and amount of Rs.3,84,911.47 on 07.06.1986 were kept in sundry account by defendant no. 6 and copy of the statement of Sundry account is placed at Exh.318. The Trial Court while disposing the suit has directed to transfer this amount which during the pendency of the appeal has been now invested by the Registry in the Fixed Deposit with State Bank of India. 182. On perusal of the deposition of witness no. 1 of the plaintiff - Anilbhai Chandubhai Pota, it is deposed in the examination-in-chief that payment of third consignment was received by defendant no. 1 in two parts as Yugoslavian buyers made the first payment as per the standard quality of the goods received and dispute of quality was....
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....4 did not pay the amount of the goods and further denied that no amount is sent by the Yugoslavian buyers for the goods manufactured by the plaintiff which were exported by defendant No. 5 for 2nd and 3rd consignment. Regarding counter claim of the defendant nos. 1 to 4, witness also deposed in examination in chief to the effect that the plaintiff had informed defendant No. 5 to return the goods which is placed on record at Exh.451 and letter dated 10.03.1979 which is at Exh No. 452 and letters dated 30.04.1979, 09.05.1979 at Exh. 453 to Exh.455, letter written to Air India to export the goods through air cargo is also placed at Exh.456 and reply given by the Air India is placed at Exh.457. Even the customs officer has written letter to the plaintiff for return of goods as it was sent from Kandla Free Trade Zone without payment of duty. Said letters are placed from Exh.458 to 460. 186. Considering such documents, it was deposed that the details given in para no. 20 of the counter claim are not true and correct and defendant nos. 1 to 4 have concocted the story of damages to raise exaggerated counter claim. 187. In the cross examination, carried out on behalf of defendant nos.....
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....xed on 14.02.1979 and after receipt of the amount by the bank, the same was credited in the account of the defendant firm. It was deposed that the documents were in the name of defendant firm and therefore, the plaintiff was not entitled to receive such amount, and the amount was permitted to be withdrawn by the defendant no. 1 firm, and the defendant firm adjusted the amount against the outstanding dues of the bank. It was also deposed that 3rd consignment was sent through airway bill dated 04.05.1979 and the documents were deposited with the bank on 09.05.1979 and in the airway bill only name of "House of Dubary" was stated as shipper. 190. It also emerges from record that payment for 3rd consignment was also received from Yugoslavian buyers by the defendant no. 6 Bank and in view of stay order granted, payment of 3rd consignment of about Rs. 37 Lacs were not paid to the defendant firm but the said amount was kept in sundry account. It was deposed that payment of 3rd consignment could not be made by the bank as the airway bill, inspection and Letters of Credit had expired and there was no agreement between the plaintiff and defendant firm with the bank for making payment direc....
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....rs of Credit had expired, same was deposited in the account of defendant no. 1. 196. With regard to 3rd consignment, it was deposed that the plaintiff informed defendant no. 1 firm when the goods reached from Kandla to Mumbai and it was informed by the plaintiff that such goods were to be exported on their own and after Hasmukh Khatri requested for negotiation with regard to 3rd consignment, defendant no. 1 paid the amount of airfreight etc. as there was no financial facility with the plaintiff. It was also deposed that defendant no. 1 firm paid clearing, handling service demurrage amount for 3rd consignment which was to be paid by the plaintiff and the said amount is stated in the counter claim. It was therefore, deposed that as the plaintiff was required to pay the charges of freight, demurrage etc., amount received from Yugoslavian buyers was adjusted against such charges to be received from the plaintiff by deducting the amount to be payable to the plaintiff and as defendant no. 1 firm could not earn profit of about Rs. 20 Lacs had the plaintiff sent the goods within the period of Letters of Credit, the said amount was included in the counter claim filed by the defendant nos....
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....nt which are admittedly exported, Letters of Credit had already expired and inspite such fact being known to everyone that Letters of Credit had expired, 2nd consignment was also exported and payment was received from the Yugoslavian buyers and third consignment was detained by defendant No. 5 Clearing and Forwarding Agent for about four months and ultimately, the said consignment was also exported and defendant no. 1 firm received the payment by encashing the Letters of Credit on the basis of airway bill in its name without utilising the A.R.4 Form which were sent by the plaintiff firm along with the goods. 204. Thus, the defendant no. 1 firm exported the goods of 2nd and 3rd consignment without considering the Letters of Credit which were issued in favour of the plaintiff. Hence, it cannot be said that the Trial Court has erred in holding that contract was independent of Letters of Credit. 205. Points for Determination No. 7 and 8 raise a very important issue as to whether the decretal amount is arbitrary and based on manifest error or not and whether the trial Court was just and correct in decreeing the suit for Rs. 49,81,336/- and disallowing the claim of the plaintiff fo....
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....sent in the third consignment along with othe goods. On basis of this fact, I have found that the firm House of Dubary had received the total amount of Rs. 34,49,578-07 paise including the item of "shella" and the item of Binoculars of the second consignment from Yugoslavian buyers which being credited in the account of the firm in New Bank of India Ltd., New Delhi as per Ex.388 showing the same in red ink circle. This shows that this total amount of Rs. 34,49,578-07 paise was including the value of the goods "shella" and Binocular which being supplied by Hashmukh Brothers and therefore it will be required to be deducted from the total amount of Rs. 12,92,87-96 paise out of such total balance. After deducting such amount, we will get the total amount of Rs. 21,56,570-71 paise which will be the amount of the second consignment as received by the firm House of Dubary as per vide Ex. 388 from the Yugoslavian buyers. I have already stated above that the firm House of Dubary paid the chatter freight for the second consignment of the amount Rs. 1,91,646-00 If we will deduct this amount of freight, of the total amount of Rs. 21,56,570.71 paise then will be got the amount of Rs. 19,64,924-....
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....duced by the plaintiff itself under mark 202/6 (on page No. 5 to 7). I have carefully examined the statement of the accounts mark 202/6 and found that the plaintiff has shown the value on basis C & F eventhough mentioned in the plaint the value on basis C.I.F. without deducting the one percent value of the insurance as per the correspondence. I have further found that the invoice H.K. No.8 and the invoice H.K.No. 9 relating to the item "Shella" and the item "Binoculars" are not entered into books of account of the plaintiff even if mentioned in the plaint covering such two items as to be supplied by the plaintiff, where there was no orders and contract for the same with the plaintiff but the orders were under the con tract with M/s. Hashmukh Brothers." 207. Regarding 3rd consignment, the Trial Court has held that the plaintiff is entitled to the amount of Rs. 30,20,912.75 after deducting freight of Rs. 5,30,806/- as under: "139).....As regards to third consignment is concerned, it is clear that the goods were sent to Yugoslavian buyers on 4-5-79 vide air-way bill ex, 317. The invoice at Ex. 316 speaks that in the third consignment, the goods were sent viz. A Car Radio c....
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....09. Thus, the Trial Court has passed the decree for Rs. 49,81,336/- (for 2nd consignment Rs.19,60,473.50 and for 3rd consignment Rs.30,20,912.75). 210. In view of aforesaid findings of the Trial Court which is borne out from the oral and documentary evidence on record, it cannot be said that decretal amount is arbitrary and based on manifest error. There is no error in arriving at decretal amount of Rs. 49,81,336/-awarded by the Trial Court. 211. Point for Determination no. 9 pertains to counter claim raised by defendant no. 1 by filing the written statement under Order VIII Rule 6(A) of the Code of Civil Procedure, 1908 raising a claim of Rs.1,08,85,152/-. 212. Learned advocate Mr. Joshi appearing for the plaintiff raised preliminary objection regarding the maintainability of the appeal filed by the defendant nos. 1 to 4 contending that First Appeal with counter claim itself would not be maintainable in view of bar contained under section 69 of the Indian Partnership Act, 1932. 213. Learned Trial Judge while answering issue no. 2(G) at para no. 119 and 122 of the impugned judgment and order has discussed this issue and answered that counter claim is not maintainable on....
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....alise the property of an insolvent partner. (4) This section shall not apply - (a) to firms or partners in firm which have no place of business in the territories to which this Act extends, or whose places of business in the said territories are situated in areas to which, by notification under section 56 this Chapter does not apply, or OF GUJARAT (b) to any suit or claim of set-off not exceeding one hundred rupees in value which, in the presidency towns, is not of a kind specified in section 19 of the Presidency Small Cause Courts Act, 1882, or outside the Presidency towns, is not of a kind specified in the Second Schedule to the Provincial Small Cause Courts Act, 1887, or to any proceeding in execution or other proceeding incidental to or arising from any such suit or claim. Comment: "...Thus, the persons suing, namely, the current partners as on the date of the suit were not shown as partners in the Register of Firms. The result is that the suit was not maintainable in view of the provisions of sub-sec. (2) of S. 69 of the said Partnership Act..." M/s. Shreeram Finance Corporation, Appellants v. Yasin Khan AIR 1989 SUPREME COURT 1769 ....
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....ling within the ambit of section 69 of the Partnership Act. In the instant case, Seth Suganchand had to admit in unmistakable terms that the firm 'Sethiya & Co.' was not registered under the Indian Partnership Act. It cannot also be denied that the suit out of which the appeals have arisen was for enforcement of the agreement entered into by the plaintiff as partner of Sethiya & Co. which was an unregistered firm. That being so, the suit is undoubtedly a suit for the benefit and interest of the firm and consequently a suit on behalf of the firm. It is also to be borne in mind that it was never pleaded by the plain- tiff, not even-in the replication, that he was suing to recover the outstandings of a dissolved firm. Thus the suit was clearly hit by section 69 the Partnership Act and was not maintainable." 216. While examining as to embargo contained under sub-section 3 of Section 69, wherein the expression "other proceedings" is found. The Apex Court in the case of M/s. Umesh Goel versus Himachal Pradesh Cooperative Group Housing Society Ltd. reported in AIR 2016 SC 3116, has held: "8. Having heard learned counsel for the appellant as well the respondent and havi....
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....firm even relating to a set off or other proceedings only when such claim of set off or other proceedings are intrinsically connected with the suit that is pending in a Court. To put it differently, in order to invoke sub-section (3) of Section 69 and for the ban to operate either the firm should be an unregistered one or the person who wants to sue should be a partner of an unregistered firm, that its / his endeavour should be to file a suit in a Court, in which event even if it pertains to a claim of set off or in respect of 'other proceedings' connected with any right arising from a contract or conferred by the Partnership Act which is sought to be enforced through a Court by way of a suit then and then alone the said sub-section can operate to its full extent. 13. As far as the construction of the said sub-section (3) of Section 69 is concerned, we are able to discern the above legal position without any scope of ambiguity. To be more precise, the condition precedent for the operation of ban under sub-section (3) is that the launching of a suit in a Court of law should be present and it should be by an unregistered firm or by a person claiming to be partner of ....
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....sideration in this case is whether the six deft., New Bank of India is liable for the fraud as to be committed by the deft., Nos. 1 to 5 regarding to their consignment whereby is the six deft., committed negligence in tort. The learned advocate Shree Bheda for the plaintiff submits that the New Bank of India was liable to make the payments of the second and third consignments under the letters of credit on receipt the actual amounts from the Bank of the Yugoslavian buyers even if failed to do so and permitted the first deft., to be converted the said moneys in personal account of the first deft., which being amounted of the conversion on basis of the fraud and collusion of the defts., Now on the facts and circumstances of the case before us., the Yugoslavian buyers opened the irrevocable seven letters of the credit towards the payments of the orders of the goods in favour of the first deft. The Zerox copies of such letters of credit are produced by the deft., which are exhibited vide Exhts., 283 to 289. After that, in turn, the New Bank of India opened the four letters of credit in favour of the plaintiff in the State Bank of India, Branch office Kandla. Zerox copies of such letter....
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....ant nos. 5 and 6. In our opinion, the Trial Court has rightly concluded that the rest of the suit and the claim stands dismissed against defendant nos. 5 and 6. 223. Point for Determination no. 11 pertains to whether the decree passed by the Trial Court for Rs. 49,81,336/- is just and proper. 224. At this stage, it is pertinent to note that on appreciation of oral and documentary evidence on record, the Trial Court has not granting set off of the expenses borne by the defendant no. 1 firm for export of the goods of 2nd and 3rd consignment through defendant No. 5. However, from the findings which emerge from the facts on the basis of oral and documentary evidence, amount of expenditures incurred by defendant no. 1 firm are required to be considered to be set off against the amount of decree passed by the Trial Court in favour of the plaintiff. The amount paid by defendant no. 1 firm for export of second and third consignment is discernible from the counter claim of defendant nos. 1 to 4 which is supported by the oral evidence of the defendant no. 2 as analysed herein above. 225. Therefore, for the purpose of rendering substantial justice to see that the amount spent by defe....
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.... paid by the defendant no. 1 firm towards demurrage charges in para no. 140 of the judgment and order and has rejected the claim of Rs. 10 Lacs on the ground that the plaintiff has supplied the goods which were not upto the mark of standard in para no. 141 of the judgment and also referred to Exh. 318 that by the letter by Yugoslavian buyers remitted the amount of Rs.3,84,711/- which was withheld for the defective goods. Even reference was made to letter at Exh. 418 where value of defective goods have been shown in US$ 65,595 and towards the value of defective goods Yugoslavian buyers had paid amount of Rs.3,84,711/- and has come to the conclusion that the entire amount had been paid and the Yugoslavian buyers had not deducted any money towards the defective goods. Accordingly, the Trial Court has held that the claim for defective goods does not survive. 230. Regarding the deficit goods, it was observed by the Trial Court in para no. 141 of the judgment that as per the Letter at Exh. 418, goods worth US$ 8291 equivalent to Rs.65,000/- were sent under the insurance with full value on the basis of C.I.F. and therefore, the defendants would be entitled to take legal course for reco....