Cimmco Ltd. vs M/S. Toepfer International-Asia ...
2000 Latest Caselaw 773 Del

ORDER

Vikramajit Sen, J.

1. This is an application under Order VII Rule 11 read with Section 151 of the Code of Civil Procedure filed by the United India Insurance Co. Limited. It is contended in this application, inter alia, that there is no privity of contract between the Plaintiff, Defendant No.1, namely, M/s. Teopfer International-Asia Pte. Ltd. (hereinafter referred to as 'Teopfer') and the Applicant. The facts are not in serious dispute. A contract had been entered into between the Plaintiff and Teopfer for the supply of a quantity of 508.213 metric tons of Indian Toasted Soyabean Extraction FAQ Flakes-Yellow. Some controversy has been generated on the issue whether this was a FOB Contract or FAS Contract. The Plaintiff appears to have made supply against this contract which was to be shifted to Defendant No.1. The consignment was placed upon barge 'SEVARAM' which sank alongside the vessel M.V. MOSKOVSKIY KOMSOMLETS on 25.9.1991. As a consequence the consignment was lost. The claim is in respect of the value of the consignment.

2. When the suit was filed there were five Defendants out of which three were ordered to be struck off from the array of parties by order dated 14.7.1994. The Applicant, United India Insurance Company Limited is stated to have insured the said barge 'SEVARAM'. It is not in dispute that the consignment was not insured with the Applicant. Despite several opportuni-

ties granted to the Plaintiff, even upon imposition of costs which has not been paid, no arguments were addressed on its behalf.

3. As mentioned above there is some controversy concerning as to whether the contract is FOB or FAS. The determination of this vexed question would arise in respect of the liability of Defendant No.1. It requires clarification that Defendant No.1 is not the owner of the barge 'SEVARAM'. Therefore, I fail to see any justification for impleading the Applicant as a party to the suit. Its liability would result either from a direct contract between it and the Plaintiff, or it may arise if the party who had taken insurance cover was found liable or it may even arise if there is a remote possibility that such a person could be found liable in the proceedings before the court. The owner of the barge 'SEVARAM' is not a party in these proceedings. There is accordingly, substance in the argument of learned counsel for the Applicant that a contract of insurance is only a contract of indemnity between the insured and the insurer. The Plaintiff is not the insured, and the insured party is not before the Court in these proceedings.

4. Normally, the best indication to find out whether a party is a necessary or proper party is to peruse the paragraph dealing with the cause of action. On so doing, I find that there is no mention in this paragraph, of the cause of action having arisen in favour of the Plaintiff and against the Applicant. The only averment/reference in the plaint pertaining to Defendant No.4 is that the barge 'SEVARAM' had been fully insured by it.

5. I find that the Applicant/Defendant No. 2 is neither a necessary or a proper party to proceedings. The application is accordingly allowed with costs of Rs.2000/- payable by the Plaintiff to the Applicant. Since no cause of action is disclosed against this Defendant the suit, vis-a-vis the Applicant is dismissed. Resultantly, Defendant No.2 is struck off from the array of parties.