Bombay Mercantile Co-Operative ... vs Paisa Fund Glass Works And Ors.
2002 Latest Caselaw 529 Bom

JUDGMENT

S.A. Bobde, J.

1. This suit is filed by the plaintiffs Co-operative Bank inter alia for declaration that the 2,04,000 bottles manufactured by defendant No. 1 pursuant to the order placed by defendant No. 9 are validly pledged to the plaintiffs. The plaintiffs have also sought a decree for delivery of possession of 2,04,000 bottles which are the subject matter of the suit from the defendant No. 1 to defendant No. 9 and in the alternative for a direction to defendant Nos. 1 to 8 to pay to the plaintiffs a sum of Rs. 7,66,325.90.

2. At the outset Mr. Shah, learned Counsel for the plaintiffs stated that he is electing to press the reliefs in prayer Clause (d) i.e. payment in the sum of Rs. 7,66,325.90 on the ground that it is not certain whether the bottles which are the subject matter of the transaction entered into sometime in the year 1981 may not be in the possession of the defendant No. 1 who has wrongfully converted the bottles to their own use.

3. The defendant Nos. 1 to 8 have not filed their written statement. Mr. Piyush Shah, learned Counsel for the said defendants stated today, when the matter was called out, that he may be granted sometime to file written statement. In view of the fact that the suit has been filed in 1984 and has been on he Board at least since February, 2002, there is absolutely no merit in the request for further to file written statement. The said, request is, therefore, rejected.

4. The plaintiffs claim arises in the following manner. The plaintiffs bank opened a Letter of Credit No. 44/R/8 dated 2nd December, 1981 for Rs. 23,75,000/- in favour of the defendants. That letter of credit was forwarded by the plaintiffs to the Bankers of defendant No. 1 i.e. the Bank of Maharashtra. By an amendment a condition was incorporated in the Letter of Credit that the drafts under the said letter of credit must be accompanied by ocean bills of lading or godown receipt from M/s. P. Cawasji & Co. evidencing receipt of goods and stored on behalf of the plaintiffs A/c defendant No. 9.

5. The Letter of Credit was opened in favour of defendant No. 1 since the defendant No. 1 had entered into a contract to deliver 4,08,000 empty Euro beer bottles to the defendants No. 9 for onwards shipment to a foreign buyer through M/s. P. Cawasji & Co. The bottles were pledged in favour of the plaintiffs Bank by a terms contained in the application for opening irrevocable Letter of Credit signed by defendant N. 9. The said document is referred to as Exhibit "B" to the plaint and Serial No. 2 in the compilation under the List of Documents filed by the plaintiffs.

6. The plaintiffs have averred that they have made payment in the sum of Rs. 4,89,600/- under the cover of their letter dated 29th December, 1981 to the Bankers of the defendant No. 1 i.e. Bank of Maharashtra. The defendant No. 9, the plaintiffs customer took delivery of 2,04,000 bottles through M/s. P. Cawasji & Co. out of 4,08,000 bottles lying in the godown of the defendant No. 1. The Bills of Lading were duly delivered by the said M/s. P. Cawasji & Co. to the plaintiffs.

7. When the plaintiffs called upon the defendant No. 1 to furnish the said M/s. P. Cawasji & Co. to remove the balance quantity of 2,04,000 empty Euro beer bottle for shipment, the defendant No. 1 by a letter dated 28th January, 1982 informed M/s. P. Cawasji & Co. that they were willing to deliver only 36,833 bottles instead of 2,04,000 bottles. M/s. P. Cawasji & Co. by its letter dated 28th January, 1982 addressed to the defendant No. 1 at Exhibit "G" to the list of documents filed by the plaintiffs, stated that 2,04,000 bottles were stored in the premises of defendant No. 1 for direct parting and that the plaintiffs who made payment for the same had a charge on the said bottles. According to the plaintiffs, the defendant No. 1 have wrongfully obstructed and prevented the said M/s. P. Cawasji & Co. from taking delivery of the said 2,04,000 Euro beer bottles on account of some dispute between defendant No. 1 and their purchasers the defendant No. 9. The plaintiffs have averred that they have maintained bills receivable account of defendant No. 9 in the name of M/s. M.J. Durazi & Brothers and that they have debited the said account with the sum of Rs. 4,89,600 paid by the plaintiffs to defendant No. 1. According to the plaintiffs, they have also given credit for the sum of Rs. 2,45,000/- paid by defendant No. 9 to the plaintiffs. In the circumstances, a sum of Rs. 3,84,544 as per particulars referred to as Exhibit "J" to the plaint with further interest on the sum of Rs. 2,44,600/- is due and payable by defendant No. 9 to the plaintiffs in respect of the payment made by the plaintiffs under the said Letter of Credit. The plaintiffs submit that the 2,04,000 empty Euro beer bottles are validity pledged in their favour and they have valid charge over thereof to secure the due repayment of Rs. 3,84,544/- with further interest.

8. In reply to the notice sent on behalf of the plaintiffs, it appears that the stand of the defendant No. 1 was that though the plaintiffs may have paid a sum of Rs. 4,89,600/- under the said Letter of Credit and the said bottles had been delivered to the said M/s. P. Cawasji & Co., the defendant No. 1 are not liable in any way since they had a claim for damages against the defendant No. 9 and that there was no brevity of contract between the plaintiffs and defendant No. 1.

9. The plaintiffs have essentially averred that since they have made payment under the Letter of Credit the defendant No. 1 were not entitled to stop delivery of the said 2,04,000 bottles which were stored in the godown of the defendant No. 1 by the said P. Cawasji & Co. for and on behalf of the plaintiffs. In view of the arrangement between the parties, plaintiffs have averred that defendants are the agent and/or trustees of the plaintiffs in respect of the said bottles.

10. It is clear from the averment in the plaint and in particular document at Exhibit "F-4" to the plaint at Serial No. 12 of the List of Documents filed by the plaintiffs that the defendant No. 1 has clearly certified that they had delivered 4,08,000 bottles to M/s. P. Cawasji & Co. on behalf of the plaintiffs bank account M.J. Durazi & Brothers. It is clear that the plaintiffs have, therefore, admitted charge on the said goods. There is, therefore, no reason to withhold the decree as prayed for.

11. In the result, plaintiffs suit is decreed in terms of prayer Clause (a) subject to the modification that the interest shall read 12% instead of 21% as prayed for. The suit is further decreed in terms of prayer Clause (d) subject to the modification that the rate of interest will be 12% instead of 21% as prayed for. The said prayers (a) and (d) read as under :

(a) It be declared by this Honourable Court that the 2,04,000 bottles manufactured by the defendants No. 1 pursuant to the order of defendant No. 9 are validly pledged to the plaintiffs and/or that the plaintiffs have a valid charge or lien thereon to secure the due repayment of the sum of Rs. 3,84,544/- as per particulars Exhibit "J" to the plaint with further interest thereon at the rate of 21% per annum with monthly rests from the date of the suit till payment or realisation and defendants Nos. 1 and 8 have no right, title or interest therein and, are not entitled to retain the same.

(d) In the alternative to prayers (b) and (c) above, defendant Nos. 1 to 8 be ordered and decree to pay to the plaintiffs the sum of Rs. 7,66,325.90 as per particulars Exhibit "K" to the plaint with interest thereon at the rate of 21% per annum from the date of the suit till payment or realisation.

12. Costs are awarded as per Rules.

13. Refund of Court Fees as per Rules.

Certified copy expedited.

P.A. to give ordinary copy of this order to the parties concerned.