Deepak Industries Limited (Prop. ... vs Airport Authority Of India And ...
2005 Latest Caselaw 143 Del

JUDGMENT

Pradeep Nandrajog, J.

1. Plaintiff a manufacturer of auto parts brings an action against Airport Authority of India and Union of India for recovery of Rs. 35,25,000/- on the allegation that, for manufacture of its product, it imported goods under 3 invoices. On import, goods had to be cleared by the custom authorities and pending clearance were kept under the custody of Airport Authority of India. Goods got stolen while in custody of Airport Authority of India. On import, plaintiff had to effect payment to the foreign supplier. For one of the consignment even custom duty was paid. As a result of loss of the goods while in custody of Airport Authority of India, not only did the plaintiff suffer loss on account of payment made to the foreign supplier but even suffered loss of reputation and damages, apart from custom duty paid on one of the consignment.

2. Defendant No. 2 has chose not to file written statement and was proceeded ex-parte. Defendant No. 1, Airport Authority of India has, while admitting import of the goods and custody thereof, defended on the plea:-

"The plaintiff is the one who has misappropriated the consignment in question in collusion with his agent and some persons employed and working in and around the Airport area having access to the same and knowing the movement of defendant No. 1."

3. Pleadings of the parties would reflect that there is no dispute between the parties that the first consignment, having declared value of the imported goods US $ 9871 reached the Airport at Delhi on 25.9.1997. On 20.5.1998 plaintiff approached defendant No. 1 for customs examination but goods could not be made available. Qua the second consignment it is the admitted position of the parties that the declared value thereof was DM 16398.70. Consignment reached and was placed in the custody of defendant No. 1 on 21.7.1997. Plaintiff obtained order for customs examination on 16.8.1997 but approached defendant No. 1 for lifting the goods on 24.8.1998. Goods could not be located being lost. Qua third consignment admitted position is that its declared value as DM 18743.00 and it reached Delhi on 20.10.1997 and was sought to be cleared on 24.8.1998.

4. On 12.2.2004 following issues were framed:-

"1 .Whether the plaintiff is entitled to recover the amount as claimed? OPP

2. Whether the plaintiff is entitled to any interest? If so, at what rate and for what period? OPP

3. Whether there was no negligence on the part of defendant No. 1? If so to what effect? OPD

4. Relief."

5. Evidence has been led by the parties.

6. Import of the goods being admitted and custody of the imported goods with defendant No. 1 being admitted, I need not refer to the various documents of import proved by the plaintiff. Ex.PW.1/31 reflects that UCO Bank, plaintiff's banker, remitted to the foreign buyer the sum of $ 9871, being the value of the first consignment and debited account of the plaintiff in sum of Rs. 3,88,181/-, being Rs. 3,87,200/- the value in Indian rupees. Rest sum of Rs. 981/- was the commission and processing charges of the bank. Ex.PW.1/64, establishes remittance to the foreign buyer by UCO Bank and debit in the account of the plaintiff in sum of Rs. 3,63,355/-, being Rs. 3,62,411/- the rupee value of the remittance and Rs. 944/- as processing and other charges. Ex.PW.1/8 reflects remittance by UCO Bank to the foreign buyer and debit in the account of the plaintiff in sum of Rs. 4,16,227/-, being Rs. 4,15,204/- as the rupee value of the remittance and Rs. 1023/- as bank processing charges. Ex.PW.1/8, being the deposit challan establishes payment of Rs. 1,69,823/- by the plaintiff as custom duty.

7. Ex.PW.1/13, being plaintiffs letter dated 15.7.1998 establishes that defendant No. 1 was furnished with all requisite documents to enable the plaintiff to lift the first consignment and a request for custom examination for the other two consignments. Ex.PW.1/14, being plaintiffs letter dated 24.8.1998 establishes reminder by the plaintiff to defendant No. 1 to issue a non-availability certificate. Ex.PW.1/15 establishes reminder sent by the plaintiff on 1.9.1998. Ex.PW.1/16, PW.1/17, PW.1/18, PW.1/19 and PW.1/20 established constant reminders from the plaintiff to defendant No. 1 on various dates between 15.9.1998 to 18.12.1998. Ex.PW.1/21 establishes that defendant No. 1 wrote to the plaintiff on the issue requesting for furnishing bill of entry, master AWB, house airway bill and invoices. Ex.PW.1/22, being plaintiff's reply dated 19.1.1999 to Ex.PW.1/21 establishes that the plaintiff informed defendant No. 1 that all documents were supplied as also it establishes that the plaintiff resubmitted copie of the documents required. Ex.PW.1/23 to PW.1/28 establish that between 26.2.1999 to 18.8.1999, plaintiff sent repeated reminders. Ex.PW.1/29, shows that defendant No. 1 once again requested for copies of documents. Ex.PW.1/30 reflects that the plaintiff submitted further copies on 31.8.1999.

8. Ex.PW.1/32, is the plaintiffs legal notice dated 21.10.1999 served upon defendant No. 1 proved to be sent by registered post, evidenced by postal receipt Ex.PW.1/32A. Notice aforesaid contains a demand requiring defendant No. 1 to pay a sum of Rs. 13,78,536/- being the amount debited to the account of the plaintiff by its banker after remitting money to the foreign supplier and certain other sums, which I need not note at the moment. Interest was claimed on the said sum @ 24% p.q. Damages in sum of Rs. 15 lacs were also claimed. Ex.PW.1/33 is repeat legal notice dated 23.12.1999, proved to be served vide Ex.PW.1/34 being postal receipt and PW.1/38 and PW.1/39 being A.D. Cards. Ex.PW.1/33 has been served upon both defendants.

9. Plaintiff has accordingly proved remittances effected by its banker to the foreign supplier debited to plaintiff's account as also certain other charges debited by the bank on account of said remittances. Plaintiff has also established payment of custody duty in sum of Rs. 1,69,823/-. Plaintiff has however, except for stating that it has suffered damages led no evidence as to in what manner damages have been suffered, much less established the money value of damages suffered.

10. In cross-examination, witness of the defendant admitted custody of the goods. He admitted that the imported consignments were under the control, custody and possession of defendant No. 1 from the date they were deposited by the airline and were required to be kept in safe custody till delivery to the importer. Defendant No. 1 has led no evidence that plaintiff or its agent stole the goods, a defense taken in the written statement.

11. On the issue of the plaintiff delaying clearance of the goods, in cross-examination, witness of the defendant admitted that defendant No. 1 never issued any notice to the plaintiff informing it that since goods were not being lifted, defendant No. 1 would be auctioning the goods. Witness admitted in cross-examination that delay on part of importer to clear the goods does not absolve defendant No. 1 the responsibility to keep the goods in safe custody. Witness of the defendant stated in cross-examination that normally if consignment was not lifted within 120 days, defendant No. 1, after notice to the importer auctions the consignment. Witness stated, that in the instant case, defendant No. 1 neither issued any notice to the plaintiff nor auctioned the co signment.

12. Learned counsel for the defendant urged that defendant No. 1 was a bailee of the goods and it was the duty of custom department to hand over possession of the goods and, therefore, plaintiff would have no claim against defendant No. 1.

13. It may be noted that after arguments were heard and matter was reserved for judgment, defendant No. 1 moved an application being IA No. 648/2005 praying for deletion of issue No. 3 and reframing of issue No. 1. It was urged in the said application that issue be struck whether, being a bailee, defendant No. 1 was liable to the plaintiff.

14. Finding no averment in the written statement of defendant No. 1, predicating a defense that it was a bailee I had dismissed the said application vide order dated 27.1.2005.

15. In light of Ex.PW.1/31, Ex.PW.1/64 and Ex.PW.1/85 it stands established that the plaintiff suffered loss in sum of Rs. 11,67,763/- on account of loss of the goods being the amount remitted by plaintiff to its seller and bank charges. Evidence also establishes that plaintiff paid Rs. 1,69,823/- as custom duty on the first consignment.

16. Plaintiff would accordingly be entitled to a decree in sum of Rs. 13,37,586/-.

17. Defendant No. 1 cannot evade liability for the reason that goods were lost while in custody of defendant No. 1. Counsel for defendant No. 1 relied upon decision reported as 1995 (2002) DLI 455 Sprint R.P.G. India Ltd. v. Commissioner of Customs to urge that as per said decision, liability had to be on defendant No. 2.

18. A perusal of said judgment would reveal that goods were auctioned during pendency of proceedings before CEGAT. Instant case is of loss of goods while in custody of defendant No. 1. In my opinion decision reported as 1999(106) ELT 16 IAAI v. Ashok Dhawan is clearly attracted wherein in para 10 it was held:

"There is no dispute that the lost container was landed and placed in the custody of the Authority and that it was untraceable while in its custody. It was, therefore, a case to which the principle of res ipsa loquitur applied. It was for the Authority to give some explanation about how the container became untraceable, whereon the first respondent could have been relegated to a suit. Since there was no explanation whatever, the plea of the Authority that the first respondent should be relegated to a suit was taken only to buy time and the High Court was justified in requiring the Authority to compensate the first respondent for the value of the lost container."

19. Plaintiff has failed to establish any damages. Except for a bald statement of its witness that it had suffered damages, in what manner and in what sum has not been stated. Said relief is accordingly rejected.

20. Accordingly findings on the issues are as under:-

(a) Plaintiff is held entitled to recover a sum of Rs. 13,37,586/- from the defendants, liability of the defendants being joint and several. (Issue No. 1)

(b)Ex.PW.1/32 is the legal notice served upon defendant No. 1 on 21.10.1999. Ex.PW.1/33 is a repeat notice dated 23.12.1999 duly proved to be served upon the defendants evidenced by PW.1/38 and PW.1/39 being registered acknowledged cards. Since Ex.PW.1/ 32 was not served upon defendant No. 2, liability of defendant No. 2 for interest would accrue when interest was demanded in view of the provisions of the Indian Interest Act,1972. Interest has been demanded @ 24% p.a. Plaintiff has not established what interest was being offered by scheduled banks on fixed deposits. Since claim for interest is not flowing from a contract, plaintiff would be entitled to interest as per provisions of the Interest Act, 1972. Issue No. 2 is accordingly decided in favor of plaintiff and against the defendants holding that plaintiff would be entitled to interest from the defendants w.e.f. 23.12.1999 @ 10% P.A., compounded quarterly, as I take judicial notice of the fact that scheduled banks were offering interest @ 10% p.a. on fixed deposits, compounded quarterly. (Issue No. 2)

(c)On issue No. 3, res ipsa loquitur applies and accordingly it is held that defendant No. 1 was negligent in not keeping the goods in safe custody. I may only note that in the context of defense of defendant No. 1 that plaintiff delayed seeking clearance of the consignment, witness of defendant No. 1 admitted that if an importer delays clearance of the goods, liability of defendant No. 1 is not mitigated; liability being to keep the goods in safe custody. (Issue No. 3)

21. Decree is accordingly passed in favor of the plaintiff and against defendants 1 and 2, jointly and severally, in sum of Rs. 13,37,586/- with interest @ 10% p.a. compounded quarterly w.e.f. 23.12.1999 till date of decree and from date of decree till date of payment. Plaintiff would also be entitled to costs.