a) Arrest of the said Ocean Vessel Esperanza III her tackles,
apparels and furniture:
14. The defendants are threatening and intend to and will sail away
from the Sandheads/Calcutta Port any time without discharging the
plaintiff's goods covered by the said Bill of Lady unless the
unreasonable and unlawful demands of the defendants are met."
15. By an order dated 28th February, 1996 a Single Bench of this Court passed an
ad-interim order of injunction restraining the vessel M.V. Esperanza III from
leaving the port of Calcutta without securing the claim of the petitioner for a
sum of Rs.6,36,34,519.80/- (being the value of the cargo). The injunction was
to continue until 4.00 PM the next day.
16. On the next day, i.e. 29th February 1996, when the defendants entered
appearance, the single bench directed the appellants to secure the claim of the
respondent towards detention charges for a sum of Rs. 68 lakhs by way of a
bank guarantee or immovable property within or outside the jurisdiction of the
Court within 2 weeks, against which the respondent would issue delivery
orders of the consignment of the appellant.
17. Another consignee, M/s. Telco Limited, a sister concern of the appellant also
undertook to furnish security for a sum of Rs. 8.68 lakhs, detention charges
either by way of bank guarantee or by way of immovable property within or
outside the jurisdiction of this Court against delivery orders of their
consignment would also be issued.
18. The appellants furnished a bank guarantee to secure the said detention
charges. Delivery orders were issued by the defendant. The appellant obtained
and appropriated the consignment of 263 Tin Mills Blackplates in coils to their
use and benefit. The vessel left Kolkata thereafter.
19. On 3rd January, 1997 the respondent filed a written statement in AS No. 3 of
1996n wherein it was as follows:
"4. With regard to the allegations contained in paragraph 3 of the
plaint the defendant craves reference to the Bill of Lading and its
terms and conditions to ascertain this true scope and effect. A Bill of
lading No. 004 dated 28th December, 1996 was issued on behalf of the
vessel by the master acknowledging 263 coils measuring gross weight
2.510.173 K.G. to carry the same from Antwerp being the port of
loading and to discharge the same at the Calcutta, being the port of
discharge on the terms and condition recorded therein. Clause 11 of
the terms and conditions of the Bill of Lading inter alia provided that if
the vessel waits at some convenient port or place or at the designated
discharge port any waiting time shall be paid for by the merchant as
detention at the rate set out in clause 12 of the said Bill of Lading. A
pilot strike was prevailing at the Calcutta Port in February 1996. The
said vessel dulygave notice to the plaintiff and other cargo owner that
the defendant would not bring the vessel to Calcutta unless they were
prepared to pay detention charges and thereafter brought the vessel to
Calcutta on the terms that the detention charges would be paid by
them. The vessel M.V. Esperanza-III arrived at Sandheads on 16th
February, 1996. Notice of readiness was duly issued on behalf of the
vessel but the said vessel was detained at Sandheadasdue to Pilot
Strike at Calcutta Port which was called off on 26th February 1996 and
the vessel was berthed on 28th February 1996 and discharged her
cargo. As such the defendant is entitled to detention charges as
specified in Clause 12 of contract of carriage for which notices have
been issued upon the consignee of cargo requesting them to pay the
detention charges. The plaintiff inspite of such notice and in violation
of the terms and conditions of the contract of carriage failed and
neglect to pay the detention charges of the vessel as a result of which
the defendant did not issue the delivery order. Delivery orders were
issued in terms of the orders passed by this Hon'ble Court in the
instant proceeding and upon furnishing Bank Guarantee by the
plaintiff. The defendant is entitled to the detention charges without
any ambiguity and in accordance with the terms and conditions of the
contract of carriage. The plaintiff is obliged to pay the detention
charges in accordance with the contract of carriage. The plaintiff
accepted the cargo at Calcutta on the basis that they will pay
detention charges. Save such and same what are matters of record I
deny each and every allegation contained in the said paragraph.
6. The statements contained in paragraph 6, 7 and 8 of the plaint are
denied save and except what are matters of record. Inspite of notice
being served the plaintiff failed and neglected to pay the detention
charges having committed breach of the terms and conditions of the
contract of carriage and as such was not entitled to delivery order
unless the detention charges are paid.
9. The allegations contained in paragraphs 12 to 16 of the plaint are
denied save and except what are matter of record and the defendant
repeats and reiterates the statements contained hereinabove. The
claim of detention charges by the defendant is lawful, tenable and
justified and the defendant was entitled in law to withhold the delivery
order. It is denied that such withholding of delivery order is in breach
of the agreement and in breach of duty as common carrier and/or
public carrier as alleged or that the defendant is liable to pay the
alleged losses and damages suffered or might be suffered by the
plaintiff as alleged. It is further denied that the plaintiff suffered
damages or is entitled to an enquiry. Save as such and save what are
matters of record I deny each and every allegation contained in the
said paragraphs.
14. In the facts and under the circumstances, stated above the
plaintiff is not at all entitled to the relief claimed. The plaintiff obliged
to pay the detention charges and such detention charges has been
secured by way of Bank Guarantee interms of the orders passed in the
instant proceedings. Considering the facts of this case this Hon'ble
Court should be pleased to direct encashment or the Bank Guarantee
and to direct the proceeds thereof be paid to the defendant."
20. The suit appeared in the Cause List of the Single Bench on 24th June, 2024for
hearing. Counsel for the appellant submitted that he had no instructions from
his client. The respondent submitted that the suit is unnecessary since the
appellant has received delivery of the goods and demanded encashment of the
bank guarantee.
21. The suit was decreed on the said day with a direction on the appellant to renew
the bank guarantee within one month from date and permitted the respondent
to encash the same. In the event the bank guarantee was not renewed the
defendant/respondent was held entitled to a decree for Rs. 68 lakhs and the
suit was decreed and disposed of.
22. On an application for recall of the Court's order dated 24th June, 2004,being
G.A. 2683of 2004, by order dated27th July, 2004, the decree was recalled and
the appellants were directed to furnish a fresh bank guarantee for Rs. 68 lakhs
within 2 weeks from date. The bank guarantee was renewed from time to time.
23. Sometime in the year 2008 the respondent filed an application being GA No.
4111 of 2008 before the interlocutory court seeking leave to encash the bank
guarantee. Affidavits were exchanged. The defendant relied upon two letters
dated 7th June, 2008 [Exhibit 7] from M/s. P & I Services Pvt. Ltd. and the
reply dated 22nd June, 2008 [Exhibit 8] issued by the Kolkata Port Trust
whereby it was confirmed that there was a river pilots strike in Kolkata Port
between 16th to 28th February, 1996. In reply thereof, the appellants contended
that since there was no counterclaim filed by the defendants, they are not
entitled to any such relief.
24. The respondents thereafter filed GA No. 1486 of 2012 seeking amendment to
the written statement. Only one paragraph being No. 15 which formally raised
a counterclaim against the appellant was proposed to be added. The said
paragraph is set out herein below:
"15. Without prejudice to what is contained in Paragraph 14 hereof
defendant claims and/or counter claims as follows:
a) An order and/or Decree directing the Registrar Original Side, to
encash the Bank Guarantee for Rs.68,00,000/- given by the plaintiff
in favour of the said Registrar and to pay the same to the Defendant
with all accrued interest.
b) An Order and/or Decree directing the Registrar Original Side to
encash the Bank Guarantee for Rs.68,000,000/- given by the plaintiff
in favour of the Registrar and to pay to the Defendant such sums as
seems fit and proper to this Hon'ble Court.
c) Such further or other Order and/or Decree and/or Directions
be passed by this Honourable Court as seems fit and proper and in the
interest of justice."
25. The said two applications were taken up by a Single Bench of this Court on 3rd
August, 2012.The Single Judge while holding that all ingredients of a counter-
claim were already available in the original written statement filed by the
respondents, permitted amendment of the plaint.
26. On an appeal being APO 140 of 2012 against the said order dated 3rd August,
2012 a Division Bench of this Court disposed of the same by order dated12th
November 2012, holding that, all the observations of the Single Judge must be
deemed as prima facie. The amendment to the written statement was allowed
subject to the appellant's contention that the counterclaim was barred by
limitation.
27. The suit was taken up for final hearing and two issues were framed by the
Court.
a) Is the defendant entitled to a sum of Rs. 68 lakhs as claimed in
paragraph 15(b) of the written statement?
b) Is the claim of the defendant is barred by laws of limitation?
C. The Evidence in the Suit
28. The evidence in the suit was directed to be recorded before a Commissioner
appointed by the Court. The Commissioner in its Minutes of the meeting dated
10th June 2017 recorded that the "plaintiff's advocate submitted that he does
not wish to adduce any evidence and plaintiff does not wish to proceed in its
claim".
29. On behalf of the defendants, however, two witnesses were examined. DW 1 was
Gopal Krishna Bhattacharjee who was an employee of the agents of the carrier
defendant M/s. Oceanic Shipping Agency Pvt. Ltd. DW 2 was Dilip Krishna
Chatterjee an employee of P & I Services Pvt. Ltd. The defendants, inter alia
proved the Charter-party, Bill of Lading, invoices issued towards detention
charges for Rs. 68 lakhs, notices issued to the plaintiff/appellant dated 9th
February, 1996 and a letter of the Kolkata Port Trust dated 7th June, 2008
confirming that there was a pilot's strike at the Kolkata Port between 5th
February, 1996 and 25th February, 1996. Each of the aforesaid documents
were marked as exhibits in the suit.
30. The suit was listed for final hearing on 32 dates between 3rd February, 2022
and 15th June, 2024. On the said dates, the plaintiff's advocates either
remained absent and/or sought adjournment on one pretext or the other.
When the hearing finally commenced the plaintiff contended that the
defendant's counterclaim was barred by limitation since the amendments to
include the counterclaim, in the year 2012, was beyond the period of
limitation. The defendant is not entitled to detention charges since they did not
offer to deliver the goods at a nearby port nor made any attempt to mitigate the
losses. It was also argued that the written statement has been filed not by the
defendant but on somebody masquerading as the defendant. It was further
argued that the witness on behalf of the defendant was not authorised to
depose on behalf of the owners of the vessel.
31. The defendant argued that the plaintiff not agreeing to proceed with the claim
has failed to discharge its burden to prove and has abandoned the suit after
enjoying interim orders. The suit is liable to be dismissed on this ground alone
and the defendant must be permitted to encash the bank guarantee of Rs. 68
lakhs, interest on Rs. 68 lakhs is also prayed for. It is specifically argued that
the formal counterclaim included in the written statement by way of
amendment was without prejudice to the rights of the defendants and that
there was no need to file a counterclaim. The Single Judge proceeded to decide
the matter on the basis of Section 101, 102, and 103 of the Evidence Act.
D. The Findings of the Single Bench
32. It was held by the single bench that the plaintiff failed to discharge its burden
of proof that the claim of the defendant for detention of charges was wrongful.
The plaintiff could not be permitted to obtain delivery of goods by way of
interim orders and enjoy the benefit thereof and abandon the claim for main
reliefs subsequently. The plaintiff was found unjustly enriching itself.
33. The Court found that the defendant was able to prove its claim towards
detention charges and the suit was not barred by limitation. The suit was
dismissed and all pending interim applications were also dismissed. The Court
found that an act of court i.e. the interim order of arrest and subsequent
release of the ship against the plaintiff furnishing bank guarantee gave undue
advantage and enrichment to the plaintiff.
34. The Court found that the parties ought to be placed in the position that they
would have been if the interim order had not existed and applied Section 144 of
the CPC. The bank guarantee was directed to be encashed by the Registrar,
Original Side, and paid to the defendant/respondent/cross-objector. A 6%
interest per annum was awarded from 24th April, 1996 till the date of payment.
E. Findings of this Court
35. This Court has heard lengthy arguments by learned Senior Counsel for the
Parties Mr. Banerjee and Mr. Ramavardhan. The first question to be decided in
the opinion of this Court is as to whether the defendant was required to file a
formal counterclaim in a suit of this nature i.e. an Admiralty Claim.
i) The Need For a Counterclaim and the issue of Limitation
36. Section 11 and 12 of the Admiralty (Jurisdiction and Settlement of Maritime
Claims), Act, 2017, of the Act prescribe as follows:
"11. Protection of owner, demise charterer, manager or operator or
crew of vessel arrested.--(1) The High Court may, as a condition of
arrest of a vessel, or for permitting an arrest already effected to be
maintained, impose upon the claimant who seeks to arrest or who has
procured the arrest of the vessel, an obligation to provide an
unconditional undertaking to pay such sums of money as damages or
such security of a kind for an amount and upon such terms as may be
determined by the High Court, for any loss or damage which may be
incurred by the defendant as a result of the arrest, and for which the
claimant may be found liable, including but not restricted to the
following, namely:-- (a) the arrest having been wrongful or unjustified;
or (b) excessive security having been demanded and provided. (2)
Where pursuant to sub-section (1), the person providing the security
may at any time, apply to the High Court to have the security reduced,
modified or cancelled for sufficient reasons as may be stated in the
application. (3) If the owner or demise charterer abandons the vessel
after its arrest, the High Court shall cause the vessel to be auctioned
and the proceeds appropriated and dealt with in such manner as the
court may deem fit within a period of forty-five days from the date of
arrest or abandonment: Provided that the High Court shall, for
reasons to be recorded in writing, extend the period of auction of the
vessel for a further period of thirty days.
12. Application of Code of Civil Procedure.--The provisions of the Code
of Civil Procedure, 1908 (5 of 1908) shall apply in all the proceedings
before the High Court in so far as they are not inconsistent with or
contrary to the provisions of this Act or the rules made thereunder."
37. A combined reading of Section 11 and Section 4(1)(g) of the Act of 2017 would
clearly establish that a counterclaim under an agreement relating to the
carriage of goods is inherent to and embedded in a maritime claim and is hence
required to be decided by a Court under Section 11 of the Act of 2017.The said
provisions have also been deemed to be part of common law principles applied
in India before the advent of the Act of 2017. Reference in this regard is placed
in the cases of Chrisomar Corporation v. MJR Steels Pvt Ltd reported in
(2017) 10 SCC 774 and M.V. Elizabeth v. Harwan Investment and Trading
Corporation Ltd reported in (1993) Supp (2) SCC 433.
38. The expression "and for which the claimant may be found liable" used in
Section 11 above clearly implies that a counterclaim of a defendant in an
admiralty action is embedded within Section 11 itself. The defendant is merely
required to raise it in his defence. If after the trial the defendant succeeds the
sum payable to him reserved in the form of security for release of the vessel
must be decreed in its favour. It is irrelevant as to who is required to furnish
security i.e. the claimants or the owner of the vessel.
39. It also therefore follows from the above and Section 12 of the Act of 2017 that
raising of a counterclaim by use of the expression "counterclaim" may not be
mandatory as prescribed under Order VIII Rule 6B of the CPC in a given case
as available in the instant case. It is only if the defendant in a suit made a
claim outside the scope of the claim of the plaintiff that he would be required to
formally plead a counterclaim in terms of Order VIII Rule 6B.
40. A Counterclaim would be required only if the defendant has further and other
claims not pleaded by a claimant in an admiralty action. This must be
understood as the object and purpose of Section 12 of the Act of 2017. The Act
of 2017 is nothing other than a codified version of the Maritime law as it stood
and was applied by Indian Courts based on the national laws on the carriage of
goods by sea and other laws and international conventions applied in Common
law.
41. The right of a carrier, both in common law and in terms of a Bill of lading, to a
lien on the goods for demurrage and/or detention charges is recognized by the
Supreme Court at Para 7 of the decision of the Supreme Court cited by learned
Counsel for the respondent being Shipping Corporation of India Ltd. v. C.L.
Jain Woollen Mills & Ors. reported in (2001) 5 SCC 345.
"7. Before examining the correctness of the rival submissions, one thing
is crystal clear that the relationship between the importer and the carrier
of goods in whose favour the Bill of Lading has been consigned and who
has stored the goods in his custody, is governed by the contract between
the parties. Section 170 of the Indian Contract Act engrafts the principle
of bailee's lien, namely, if somebody has received the articles on being
delivered to him and is required to store the same until cleared for which
he might have borne the expenses, he has a right to detain them until his
dues are paid. But it is not necessary in the case in hand to examine the
common law principle and the bailee's lien inasmuch as the very terms of
the contract and the provisions of the Bill of Lading, unequivocally
conferred power on the appellant to retain the goods, until the dues are
paid. Such rights accruing in favour of the appellant cannot be nullified
by issuance of a certificate of detention by the Customs Authorities
unless for such issuance of detention certificate any provisions of the
Customs Act authorise. We had not been shown any provisions of the
Customs Act which would enable the Customs Authorities to compel the
carrier not to charge demurrage charges, the moment a detention
certificate is issued. It may be undoubtedly true that the Customs
Authorities might have bona fide initiated the proceedings for
confiscation of the goods which however, ultimately turned out to be
unsuccessful and the Court held the same to be illegal. But that by itself,
would not clothe the Customs Authorities with the power to direct the
carrier who continues to retain a lien over the imported goods, so long as
his dues are not paid, not to charge any demurrage charges nor the so-
called issuance of detention certificate would also prohibit the carrier
from raising any demand towards demurrage charges, for the occupation
of the imported goods of the space, which the proprietor of the space is
entitled to charge from the importer. The importer also will not be
entitled to remove his goods from the premises unless customs clearance
is given. But that would not mean that demurrage charges could not be
levied on the importer for the space his goods have occupied, since the
contract between the importer and the proprietor of the space is in no
way altered because of the orders issued by the Customs Authorities. The
learned Additional Solicitor General vehemently argued and pressed sub-
section (2)(b) of Section 45 in support of his contention that the imported
goods have to be dealt with in accordance with the permission in writing
of the proper officer of the Customs Department and in exercise of such
power when the Customs Authorities initiate adjudication proceeding and
ultimately confiscate and levy penalty, when such order is struck down
and a detention certificate is issued, the said issuance of detention
certificate would come within the expression "otherwise dealt with" used
in Section 45(2)(b), and therefore, the proprietor of the space would be
bound not to charge any demurrage charges. We are unable to accept
this contention inasmuch as the expression "otherwise dealt with" used
in Section 45(2)(b), in the context in which it has been used, cannot be
construed to mean, it authorises the Customs Officer to issue a detention
certificate in respect of the imported goods, which would absolve the
importer from paying the demurrage charges and which would prevent
the proprietor of the space from levying any demurrage charges. Having
scrutinized the provisions of the Customs Act, we are unable to find out
any provision which can be remotely construed to have conferred power
on the Customs Authorities to prevent the proprietor of the space from
levying the demurrage charges and, thereby absolving the importer of the
goods from payment of the same. In fact the majority decision in Grand
Slam International case [International Airports Authority of India v. Grand
Slam International, (1995) 3 SCC 151] clearly comes to the aforesaid
conclusion with which we respectfully agree."
42. The lis before the Single Judge was whether the defendant was entitled to the
detention charges for the period between 16th and 26th of February 1996 when
the vessel was detained at the sand-heads at Kolkata. The entitlement and
claim of the defendant which was a maritime claim is clear and explicit from
the plaint itself. The defendant therefore did not have to make or plead any
formal counterclaim as prescribed under Order VIII Rule 6B of the Code of Civil
Procedure 1908.
43. In the instant case since the defendant had only joined issue with the plaintiff
on the question of payment of detention charges disputed by the plaintiff in the
plaint Para 14 of the original written statement set out herein above would
suffice without any formal counter-claim being raised in terms of Order VIII
Rule 6B of the Code. The defendant has pleaded his entitlement to detention
charges as the cause of the non-delivery of goods to the plaintiff.
44. Since the defendant had already raised its maritime claim/ counterclaim in the
unamended written statement the claim of the defendant is clearly within
limitation. In view of the discussions made hereinabove, the defendant, as a
matter of abundant caution and without prejudice to the statement made in
Para 14 of the written statement, has raised a formal counterclaim in terms of
Order VIII Rule 6B of the Code in 2012. The genesis of such a counterclaim is
already contained in its original written statement that was filed within the
period of limitation.
45. Even assuming for the sake of argument that the defendant was required to
formally plead and raise a counterclaim in terms of Order VIII Rule 6B,
paragraph 11 of the decision of the Supreme Court in the case of Laxmidas
Dayabhai Kabrawala v. Nanabhai Chunilal Kabrawala & Ors. reported in
1963 SCC Online SC 128 is of relevance:
"11. The question has therefore to be considered on principle as to
whether there is anything in law -- statutory or otherwise -- which
precludes a court from treating a counter-claim as a plaint in a cross-
suit. We are unable to see any. No doubt, the Civil Procedure Code
prescribes the contents of a plaint and it might very well be that a
counter-claim which is to be treated as a cross-suit might not conform to
all these requirements but this by itself is not sufficient to deny to the
Court the power and the jurisdiction to read and construe the pleadings
in a reasonable manner. If, for instance, what is really a plaint in a cross-
suit is made part of a written statement either by being made an
annexure to it or as part and parcel thereof, though described as a
counter-claim, there could be no legal objection to the Court treating the
same as a plaint and granting such relief to the defendant as would have
been open if the pleading had taken the form of a plaint. Mr Desai had to
concede that in such a case the Court was not prevented from separating
the written statement proper from what was described as a counter-claim
and treating the latter as a cross-suit. If so much is conceded it would
then become merely a matter of degree as to whether the counter-claim
contains all the necessary requisites sufficient to be treated as a plaint
making a claim for the relief sought and if it did it would seem proper to
hold that it would be open to a court to convert or treat the counter-claim
as a plaint in a cross-suit. To hold otherwise would be to erect what in
substance is a mere defect in the form of pleading into an instrument for
denying what justice manifestly demands. We need only add that it was
not suggested that there was anything in Order 8, Rule 6 or in any other
provision of the Code which laid an embargo on a court adopting such a
course."
46. Applying the aforesaid to the case at hand it is clear that paragraph 14 of the
original written statement and other paragraphs clearly raise a claim counter
to the plaint case and join issue with it. This Court is therefore inclined to hold
that the defendant has clearly raised a counterclaim against the plaintiff, both
in the original written statement and the amended written statement, within
the period of limitation prescribed therefor.
47. The decision cited by Mr. Ratnanko Banerjee, learned Counsel for the appellant
namely in the case of Rajini Rani and Anr. v. Khairati Lal & Ors. reported
in (2015) 2 SCC 682 and Ashok Kumar Kalra v. Wing Commander
Surendra Agnihotri & Ors. reported in (2020) 2 SCC 394 do not have any
manner of application in the facts of the case.
ii) The issue of entitlement of the defendant to detention charges
48. The following Clauses about the entitlement of the respondent/carrier to
detention charges in the bill of lading have been omitted by the plaintiff in the
paper books/pleadings filed in this Appeal. They have been included in a
Supplementary Paper Book filed by the respondent.
"Clause 11. If the vessel waits at some convenient port or place as
aforesaid as waiting time shall be paid for by the merchant as
detention at the rate set out Clause 12"
"If and when the goods are so discharged from the vessel at the loading
port, intermediate port or wheresoever the Merchant shall bear and
pay all charges and expenses incurred in connection with such
discharge. Full bill of lading freight and charges shall be freed fom all
responsibilities in respect of such goods, the goods being at the sole
risk and expenses of the merchant. The Carrier shall not be liable for
any loss of or damage to the goods whatsoever howsoever caused and
such discharge shall constitute complete and true delivery and
performance hereunder.
If and when the goods are carried to and discharged at any
intermediate port, by the Carrie44r or substitute vessel whereby the
route selected by the carrier, in his absolute discretion as aforesaid, is
longer than that which the vessel would have otherwise taken the
merchant to pay the carrier detention as set out in clause (12) for the
period the voyage takes longer.
If the vessel walls at some convenient port or lace as aforesaid or at
the designated discharge port any waiting time shall be paid for by the
merchant as detention as the rate set out in clause (12).
d) All expenses referred to in these provisions to be borne by the
merchant shall be deemed to be freight and shall be paid in addition to
the agree freight, even if already paid, notwithstanding the fact that
the contract of carriage is on liner terms.
e) In no case the carrier shall be required to change the geographical
rotation of the vessel planned in order to reduce or minimize or
otherwise eliminate delay.
Clause 12. Detention
Detention is agreed to amount in call case to Dm 2,000 per vessel's
gross deadweight on pre day/rata. The total amount of detention
payable to the carrier shall be distributed on all merchants having ca-
go on board in proportion to their quantity of fright/tons on board. No
Merchant shall be liable for detention charges shall be deemed earned
and the Carrier shall be freed from all responsibilities in respect of
such gods, the goods being at the sole risk and expanse of the
Merchant. The Carrier shall not be liable for any loss of or damage to
the goods whatsoever howsoever cause and such discharge shall
constitute complete and true delivery and performance hereunder.
If and when the goods are carried to and discharged at any
intermediate port, by the Carrier or substitute Vessel whereby the
route selected by the Carrier in his absolute discretion as aforesaid, is
longer than that which the vessel would have otherwise taken the
merchant to pay the Carrier detention as set out in clause (12) for the
period the voyage takes longer."
49. Clause 13 of the bill of lading the following sub-clause (i) is set out herein
below:
"i)The Carrier shall have 1 lien for any amount due under this contract
and cost of recovering same and shall be entitled to sell the goods
privately or by auction to cover any claim. The Merchant is under all
circumstances responsible for the payment of freight payable by him
under this contract. This is also applicable for freights which are
payable at the port of discharge or at final destination (if on-carriage)."
50. Applying the principles laid down in the Shipping Corporation of India
decision (Supra), the appellant is bound by the aforesaid clauses in the bill of
lading, to pay detention charges to the defendant, in situations specified
thereunder.
51. The defendant with a view to mitigate the liability of the defendant towards
detention charges by way of a facsimile letter dated 8th February, 1996 [Exhibit
5] called upon the appellant to indicate if the Cargo could be discharged at a
nearby port. This detention of the vessel at the sand heads outside the Calcutta
port could have been avoided. The plaintiff/appellant did not and or refused to
respond to the same. The defendant, therefore, had no option than to wait at
the Sandhead until the pilot strike was over and berth at Kolkata to discharge
the Cargo.
52. By a facsimile message dated 19th February, 1996 [Exhibit 4] the plaintiffs were
informed of the arrival of the vessel at the Sandhead and were asked to instruct
their clearing agents to contact the defendant for issuance of delivery orders.
53. By a facsimile message dated 19th February, 1996 [Exhibit 4] the defendant
notified the plaintiff/appellant for the second time and reiterated their claim for
detention charges in terms of Clauses 11 and 12 of the Bill of Lading. It was
further stated that the Cargo would be released only after full collection of
detention charges to be worked out after the pilot strike is called off and the
vessel berths at the port of Kolkata.
54. By a similar communication addressed to other consignees [Exhibits 9/1 to
9/10] dated 16th February, 1996 the defendant notified that the Cargo would
be discharged only after the vessel berthed at Kolkata port after the conclusion
of the pilot strike. It was further notified to the said other consignees that
delivery orders for the consignment would be issued only against payment of
detention charges in terms of Clauses 11 and 12 of the Bill of Lading.
55. In a reply to a letter dated 7th June, 2008 [Exhibit 7] the Kolkata Port Trust
addressed a communication dated 22nd June, 2008 [Exhibit 8] to M/s. P & I
Services Pvt. Ltd. confirming that there was a river pilot strike at Kolkata port
between 16th and 28th February, 1996.
56. The appellant for the first time on 20th February, 1996 denied any liability for
payment of detention charges and threatened the defendant with illegal action
and arrest if the vessel left the jurisdiction of Indian Courts without
discharging the Cargo at Kolkata. The appellant was completely silent as
regards the discharge of the Cargo at any alternative port as requested by the
defendant in its letter dated 8th February, 1996 [Exhibit 5].
57. The appellant therefore failed to mitigate its liability towards payment of
detention charges. The defendant therefore became entitled to the said
detention charges in terms of Clauses 11 and 12 of the Bill of Lading. The
appellant has never questioned the illegality of Clauses 11 and 12 of the Bill of
Lading and could not do so in law. The defendant has proved by oral and
documentary evidence its entitlement to the detention charges and its formal
counterclaim. The defendant is therefore entitled to a decree for such detention
charges.
iii) The Burden of Proof
58. Paragraphs 11,12 and 13 of the plaint have been set out hereinabove clearly
demonstrate that it is the plaintiff who has asserted that the claim for
detention charges by the defendant/respondent was illegal. Prayer B to the
plaint was to seek an injunction against the vessel from leaving Kolkata
without discharging the consignment under the Bill of Lading. The plaintiff
therefore took upon itself the burden of proof under Section 101 of the
Evidence Act that the defendant was not entitled to claim detention charges.
59. The plaintiff obtained a decree in terms of the Prayer C to the plaint at an
interim stage in the suit sometime in the year 1996 itself. It had obtained the
delivery of the consignment by putting in a bank guarantee in favour of the
Registrar, Original Side of this Court for Rs.68 lakhs representing the delivery
charges.
60. If one ignores the formal counterclaim raised in the amended plaint in terms of
paragraphs 11,12,13 and 15 of the plaint read with Paragraphs 4,6,9 and 14 of
the original written statement, the burden of proof of proving the disentitlement
of the defendant towards detention charges therefore squarely rested with the
plaintiff.
61. Paragraphs 8,9 and 10 of the decision cited by the respondent in the case of
Anil Rishi v. Gurbaksh Singh reported in (2006) 5 SCC 558 would clearly
apply in the facts of the case.
"8. The initial burden of proof would be on the plaintiff in view of Section
101 of the Evidence Act, which reads as under:
"101. Burden of proof.--Whoever desires any court to give judgment as to
any legal right or liability dependent on the existence of facts which he
asserts, must prove that those facts exist.
When a person is bound to prove the existence of any fact, it is said that
the burden of proof lies on that person."
9. In terms of the said provision, the burden of proving the fact rests on
the party who substantially asserts the affirmative issues and not the
party who denies it. The said rule may not be universal in its application
and there may be an exception thereto. The learned trial court and the
High Court proceeded on the basis that the defendant was in a
dominating position and there had been a fiduciary relationship between
the parties. The appellant in his written statement denied and disputed
the said averments made in the plaint.
10. Pleading is not evidence, far less proof. Issues are raised on the basis
of the pleadings. The defendant-appellant having not admitted or
acknowledged the fiduciary relationship between the parties,
indisputably, the relationship between the parties itself would be an
issue. The suit will fail if both the parties do not adduce any evidence, in
view of Section 102 of the Evidence Act. Thus, ordinarily, the burden of
proof would be on the party who asserts the affirmative of the issue and
it rests, after evidence is gone into, upon the party against whom, at the
time the question arises, judgment would be given, if no further evidence
were to be adduced by either side."
62. The plaintiff appellant having failed to lead any evidence in this regard must be
deemed to have admitted its liability towards the defendant towards detention
charges under Clauses 11 and 12 of the Bill of Lading read with Exhibits 3
series, Exhibit 4 and Exhibit 5.
63. Several other consignees whose Cargo was being carried along with that of the
appellant on whom invoices towards detention charges were raised [Exhibits 9
series] have paid the said detention charges of the vessel duly apportioned to
them. The appellant therefore even otherwise has not been treated differently
as compared to the other consignees by the defendant, the appellant is
therefore equally liable towards the detention charges of the vessel between
16th and 28th February, 1996.
iv) The application of Section 144
64. The plaintiff obtained a decree for delivery of consignment at the ad-interim
stage in the suit. The Plaintiff thereafter chose not to lead evidence either in
support of his challenge to the detention charges or even to the counterclaim of
the defendant to the same. The plaintiff therefore abandoned the suit after
obtaining the delivery of the consignment. The finding of the single judge as
regards the unjust enrichment by the plaintiff in obtaining the interim order of
arrest, is wholly justified.
65. By reason of refusing to press its claim or lead evidence to dispute the
detention charges the plaintiff must be deemed to have conceded to the claim
of the defendant.
66. The argument of Mr. Banerjee, learned Counsel for the appellant that the
defendant had also benefited from the interim orders, in obtaining freedom
from arrest, to leave Kolkata Port after the interim order, is hubristic and
fallacious. It is at the instance of the plaintiff that the original order of
injunction was passed by the Single Judge on 28th February, 1996. Upon
modification of the order on the next date, i.e. 29th February, 1996, the plaintiff
at the ad-interim stage was able to obtain a decree in terms of Prayer C to the
plaint, not leading any evidence in support of the claim of alleged
disentitlement of the defendant to detention charges would demonstrate that
the plaintiff may have admitted to the entitlement of such charges from the
date of institution of the suit itself.
67. The defendant was and is entitled to be restored to the position as if the
plaintiff paid the said detention charges on 28th February, 1996. The defendant
was also entitled to invoke the Bank guarantee, even without leading any
evidence once the plaintiff chose not to lead any evidence in the matter. The
Single Judge therefore was right in applying Section 144 of the CPC in the facts
of the case.
68. Reference in this regard is made in the decision of South Eastern Coalfields
Ltd. v. State of M.P. & Ors. reported in (2003) 8 SCC 648 at paragraph
26cited by learned Counsel for the respondent cross-objector would clearly
apply to the facts of the case, it was held as follows:
"26. In our opinion, the principle of restitution takes care of this
submission. The word "restitution" in its etymological sense means
restoring to a party on the modification, variation or reversal of a decree
or order, what has been lost to him in execution of decree or order of the
court or in direct consequence of a decree or order (see Zafar
Khan v. Board of Revenue, U.P. [1984 Supp SCC 505 : AIR 1985 SC 39] )
In law, the term "restitution" is used in three senses: (i) return or
restoration of some specific thing to its rightful owner or status; (ii)
compensation for benefits derived from a wrong done to another; and (iii)
compensation or reparation for the loss caused to another. (See Black's
Law Dictionary, 7th Edn., p. 1315). The Law of Contracts by John D.
Calamari & Joseph M. Perillo has been quoted by Black to say that
"restitution" is an ambiguous term, sometimes referring to the disgorging
of something which has been taken and at times referring to
compensation for injury done:
"Often, the result under either meaning of the term would be the same.
... Unjust impoverishment as well as unjust enrichment is a ground for
restitution. If the defendant is guilty of a non-tortious misrepresentation,
the measure of recovery is not rigid but, as in other cases of restitution,
such factors as relative fault, the agreed-upon risks, and the fairness of
alternative risk allocations not agreed upon and not attributable to the
fault of either party need to be weighed."
The principle of restitution has been statutorily recognized in Section 144
of the Code of Civil Procedure, 1908. Section 144 CPC speaks not only of
a decree being varied, reversed, set aside or modified but also includes an
order on a par with a decree. The scope of the provision is wide enough
so as to include therein almost all the kinds of variation, reversal, setting
aside or modification of a decree or order. The interim order passed by
the court merges into a final decision. The validity of an interim order,
passed in favour of a party, stands reversed in the event of a final
decision going against the party successful at the interim stage. Unless
otherwise ordered by the court, the successful party at the end would be
justified with all expediency in demanding compensation and being
placed in the same situation in which it would have been if the interim
order would not have been passed against it. The successful party can
demand (a) the delivery of benefit earned by the opposite party under the
interim order of the court, or (b) to make restitution for what it has lost;
and it is the duty of the court to do so unless it feels that in the facts and
on the circumstances of the case, the restitution far from meeting the
ends of justice, would rather defeat the same. Undoing the effect of an
interim order by resorting to principles of restitution is an obligation of
the party, who has gained by the interim order of the court, so as to wipe
out the effect of the interim order passed which, in view of the reasoning
adopted by the court at the stage of final decision, the court earlier would
not or ought not to have passed. There is nothing wrong in an effort
being made to restore the parties to the same position in which they
would have been if the interim order would not have existed."
F. Conclusion
69. In view of the discussions above, it is held that the claim of the defendant
against the plaintiff is not barred by limitation. Issue B is answered in favour of
the defendant/Cross-objector. The defendant cross objector is also entitled to
its claim for detention charges. Issue A is also answered in favour of the
defendant/cross-objector.
70. The defendant is therefore entitled to a decree on its counterclaim for detention
charges for a sum of Rs.68,42,844/-. The plaintiff's suit is liable to be
dismissed.
71. On the question of interest, however, raised in the cross-objection filed by the
plaintiff this Court notices that the transaction between the parties is purely
commercial in nature. The detention charges were a lawful entitlement of the
defendant carrier in terms of Clauses 11 and 12 of the Bill of Lading. The
defendant cross objector has been wrongfully deprived of the user of Rs. 68
lakhs for 24 years.
72. The plaintiff may have secured the defendant by way of a bank guarantee but
has had the user of the said Rs. 68 lakhs for a period of 23 years. The conduct
of the plaintiff in delaying the hearing of the suit by more than 23 years has
caused loss and damage to the defendant.
73. In those circumstances, the defendant is entitled to interest at more than 6%
per annum, awarded by the Single Bench. The defendant shall, therefore, be
entitled to interest @ 11% per annum on and from the date of filing of the suit
till the date of actual payment. Such rate is close to the lending rates in the
financial markets. The plaintiff itself has claimed 20% interest against the
defendant in the suit.
74. The Registrar Original Side is directed to invoke the Bank Guarantee for Rs.68
lakhs and make payment to the Defendant/Cross-Objector. The
Defendant/Cross-objector shall be entitled to execute this decree towards the
balance sums as ordered hereinabove.
75. Consequently, AD-COM-4 of 2024 is dismissed. OCO 2 of 2025 is allowed.
76. With the aforesaid observations, the appeal is dismissed and cross-objection is
allowed and disposed of.
77. There shall be no order as to costs.
(RAJASEKHAR MANTHA, J.)
I agree.
(AJAY KUMAR GUPTA, J.)
