M/S Metal Udyog & Anr vs American Iron & Metal Company Inc.
2009 Latest Caselaw 3763 Del

                                                           Reported
      HIGH COURT OF DELHI : NEW DELHI

      I.A. No. 11451/09 in CS (OS) 1564/09

                       Date of Decision: September 15 , 2009

M/S METAL UDYOG&ANR.            ...    PLAINTIFFS
                 Through: Mr. Rahul Gupta with
                Aanchal Dhingra,Mr shekhar and
                Mr.Rajneesh,Advs.

                          Versus

AMERICAN IRON&METAL COMPANY INC... DEFENDANTS
               Through: Mr. Anshu Dhingra with Mr.
               Anubhav Mehrotra,Adv.for D-2

CORAM:
HON'BLE MR. JUSTICE S.L. BHAYANA

1.    Whether reporters of local papers may be allowed
      to see the judgment? Yes
2.    To be referred to the Reporter or not? Yes
3.    Whether the judgment should be reported in the digest
      or not? Yes

S.L. BHAYANA, J.

By this order, I propose to dispose of IA No.11451/09, thereby

seeking vacation and modification of ex-parte order dated 25/08/2009

of this court by which applicant /defendant no.2 was restrained from

delivering /releasing the goods (47.535MTs) as mentioned in the

alleged Bill of Lading dated 27/06/2009 to any third person.

2. The instant suit has been filed by the plaintiffs /non-applicant

against the defendants for recovery of money including the principal

amount of Rs.4500000/-along with damages in the amount of

Rs.51,25,000 along with interest @18% pa upto the date of suit and

future interest till recovery and realization.

3. To support vacation and modification of courts order by way of

this application learned counsel for the applicant argued following

grounds:

a) That there exists no privity of contract between plaintiffs and

applicant, since original Bill of Lading was never handed over

to the plaintiffs and the Bill of Lading bearing no. MSCUMO-

522983 issued by their Canadian counterpart for the

consignment in question having „NINGBO ZHAN CI METAL

INDUSTRY CO LTD" as consignee name and in view of the

same plaintiff herein are neither a consignee nor an endorsee

there under, there is absolute lack of any relationship between

them, therefore applicant is not bound to deliver the goods to

them as no title to the goods have devolved upon the plaintiff

under the amended Bill of Lading.

b) The applicant only upon the instructions of the defendant no.1

"shipper" has cancelled the original Bill of Lading issued in

favour of the plaintiff as a consignee.

c) That no cause of action has been disclosed in the plaint against

the applicant, as the alleged breach of contract is alleged to

have been committed by defendant no. 1 only and therefore Ex

parte order dated 25/8/2009 against the defendant no. 2 is bad

in law.

d) Bill of Lading relied upon by the plaintiff has already been

cancelled by the defendant no.1 and therefore non est, is not

enforceable under the law.

e) Lastly learned counsel of the applicant vehemently argued that

since, consignment has already reached the destination at

Ningbo, china and on account of Ex parte order of this court

applicant could not delivered the same to the consignee at china

even after title of the good having been already passed in their

favour, the applicant shall be liable to face the unwarranted

legal consequences.

4. On the other hand, to meet the arguments raised by the learned

counsel for the applicant, learned counsel for the non-

applicant/plaintiff raised following points:

a) That the present application is actuated with malafide intentions

and filed by defendant no.2 in connivance with defendant no.1.

b) That defendant no.2, i.e., applicant is under an obligation to

supply and deliver the goods to the plaintiff at port of

destination Mundra (Gujarat) and thereafter at Tughlakabad ,

New-Delhi as per original Bill of Lading dated 27/6/2009

(No.MSCUMO-522983).

c) Further the alleged amendment /modification carried out in the

Bill of Lading by inserting the new consignee is totally illegal

and without any authority and sanction of plaintiffs.

d) That entire action on the part of applicant thereby modifying the

Bill of Lading was in collusion with defendant No.1 Company

is against the condition of contract and highly detrimental to the

rights of plaintiffs‟ interest and not permissible in law therefore

have no legal consequences.

e) That original Bill of Lading dated 27/6/2009 was initially

issued in favour of plaintiff no.1 as consignee and the same was

„non-negotiable" in nature and defendant no.1 has no authority

to instruct the applicant to modify the same without plaintiffs

permission therefore submissions made by learned counsel of

applicant are without any basis and based on wrong facts that

now title of the goods had been passed on to the alleged

consignee in the china and he obliged to deliver the same to the

new consignee.

5. I have heard learned counsel for the parties in detail and have

also perused the record. It is an admitted fact that the plaintiffs had

placed an order for supply of 50MT of non- ferrous scrap (aluminum)

upon defendant no.1 company and towards this an advance payment

of US$23660(approx Rs11.50/-) through swift facility from their

bankers Bank of Rajasthan, New Delhi on 5/6/2009, had been made

by plaintiffs, same is confirmed by contract note dated 4/6/2009, Bill

of Lading dated 27/6/2009 and invoice dated 16/7/2009.

6. It is also apparent from the record that original Bill of Lading

dated 27/6/2009 contains plaintiffs no.1 name as consignee and

defendant no.1 as consignor and the goods are shown to have been

dispatched and started sailing on 27/6/2009 with place of delivery at

Tughlakabad Inland Container Depot New Delhi, same is confirmed

by defendant no.1 via communications dated 16/6/2009, 26/6/2009,

30/6/2009, 14/7/2009 and last Email dated 29/7/2009 confirmed by

defendant no.2 that vide contract dated 4/6/2009 and Bill of Lading

dated 27/6/2009 (No.MSCUMO-522983) goods in questions have

been already loaded for New Delhi. But the same had been diverted to

another location at Ningbo, China without any information and

authority from plaintiffs.

7. Plaintiffs have alleged that this is a clear case of fraud, be that

as it may but it is quite difficult to understand that how come a Bill of

Lading having plaintiffs name as a consignee be suddenly diverted for

another location. It is also the case of plaintiffs that international rate

of non-ferrous scrap (aluminum) having increased substantially,

defendant no.1 has become dishonest and therefore diverted some

goods in question to Ningbo, China.

8. I am of the view that defendant no.1 & defendant no.2 together

have caused problems for the plaintiffs by usurping and defrauding

the plaintiffs at the advance amount paid by the plaintiffs and later by

making modifications/amendment in the Bill of Lading in collusion

with each other in impermissible and illegal manner.

9. Plaintiffs have made out a prima facie case of fraud and breach

of contract on the part of defendant no1 along with applicant .The

balance of convenience also lies in favour of the plaintiffs as this is

the only security they have to secure their advanced payment.

10. The conduct of the applicant is also under shadow of cloud as it

made amendments/modification in the original Bill of Lading at the

behest of defendant no.1 without any information/permission of the

same to the original consignee on the face of it is illegal, mala fide

and against the principles of contract /fairness and bona fide against

the person who had made the advance payment towards the goods in

question.

11. Judgments relied upon by the learned counsel of the applicant

Dodsal Private Ltd VS Narmada Seaways Ltd, AIR 1989 BOM 96;

Bhatinda Chemicala Ltd Vs X Press Nuptse And Ors., AIR2006 Bom

311 and The Mogu Liner Ltd VS Manl Printers & Publishers, AIR

1991 Ker 183 are not applicable to the present case in view of the

peculiar facts and circumstances of this case.

12. No grounds for vacation of the order dated 25/8/2009 are made

out by the applicant. Order dated 25/8/2009 shall continue to operate

in respect of subject matter in the application.

13. Needless to say that the prima facie view taken in the present

application made herein shall be treated as tentative in nature and

shall not constitute any expression of final opinion on the issue

involved in the matter and shall have no bearing on the outcome of the

case.

14. Accordingly, application is dismissed.

CS (OS) 1564/09

List the suit on 6.10.2009, the date already fixed.

S.L. BHAYANA, J

September 15, 2009