M/S. Transport Corporation Of ... vs Andhra Bank & Another
2011 Latest Caselaw 3098 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                          RFA No.7/2002

%                                                       4th July, 2011

M/S. TRANSPORT CORPORATION OF INDIA LTD.        ...... Appellant
                   Through:  Mr. T.A. Francis, Advocate with Mr.
                             Mahesh Katyayen, Advocate and Ms.
                             Seema Tomer, Advocate.


                          VERSUS

ANDHRA BANK & ANOTHER                                   ...... Respondents
                  Through:            None.

CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

    1.   Whether the Reporters of local papers may be
         allowed to see the judgment?

    2.   To be referred to the Reporter or not?

    3.   Whether the judgment should be reported in the Digest?


VALMIKI J. MEHTA, J (ORAL)

1.            No one has appeared for the respondents although it is 3.00 P.M.

I have therefore heard the learned counsel for the appellant and am

proceeding to dispose of the appeal.


2.            This Regular First Appeal under Section 96 of Code of Civil

Procedure, 1908 (CPC) challenges the impugned judgment and decree dated

3.10.2001 whereby the suit of the respondent No.1 bank was decreed

against the appellant/transporter and also the original borrower/defendant


RFA No.7/02                                                              Page 1 of 5
 No.1/respondent No.2. I may note that in the memo of parties, there is no

numbering of the respondents, however, it is clear that the plaintiff bank is

the respondent No.1 and M/s. Shankar Engineers/borrower/defendant No.1 is

the respondent No.2.


3.            The facts of the case are that the respondent No.1 bank filed a

suit for recovery of Rs.1,52,177/- against the respondent No.2/defendant

No.1/principal borrower and the appellant/transporter/defendant No.2 on the

averments that the respondent No.2 against security of transport documents

availed credit facility from the respondent No.1 bank. It was further pleaded

in the plaint that the consignee of the goods did not retire the documents or

accept the goods and which goods remained with the appellant/defendant

No.2/transporter. It was further alleged that since the payment with respect

to goods was not made by the drawee of the negotiable instrument, the

defendant No.1/principal borrower/respondent No.2 was therefore liable to

repay the amount which was advanced against the security of the

documents. The appellant/defendant No.2 was sued on the basis of a clause

in the lorry receipt which stated that in case the lorry receipt is discounted to

a bank alongwith negotiable instrument, then, the transporter will be liable

to directly deal with the bank.    It was further the case of the respondent

No.1/plaintiff bank that on account of non-payment of the amount advanced

against the security, both the defendants i.e. the appellant and the present

respondent No.2 became liable to pay the suit amount.

RFA No.7/02                                                            Page 2 of 5
 4.            Learned counsel for the appellant has argued before me that at

the very best the bank would step into the shoes of the consignor only, and

once it stepped into the shoes of the consignor, no doubt the appellant will

have to deal with the bank in place of the original consignor, however, the

same cannot mean that as a transporter the appellant will not have lien on

the goods with respect to the freight charges and demurrage charges which

is the liability either of the consignor or of the plaintiff bank.    Learned

counsel for the appellant has also drawn my attention to the deposition of

PW-1 Sh. Rakesh Pratap Shukla, the Manager of the plaintiff bank, and in

which deposition dated 26.7.2001 the bank officer in the cross-examination

has admitted that they were liable to pay the freight charges and damage

charges (sic, demurrage charges), and, it was then admitted that such

freight charges and demurrage charges have not been paid.          Reliance is

placed by learned counsel for the appellant on clauses 8 and 9 of the lorry

receipt which read as under:-


      "8.   In cases falling under Clause 6 or 7 above, the Bank or
      claimant with Bank's authority shall be entitled to the proceeds, less
      freight and demurrage and the Transport Operator shall render full
      accounts to it/him immediately after sale.
      9.    The Consignee Bank accepting Lorry Receipt under clause 2
      above will not be liable for payment of any charges arising out of
      any lien of the Transport Operator against the consignor or the
      buyer. Where, under the IBA scheme for Recommending Transport
      Operators to Member Banks it becomes necessary for any Bank to
      obtain delivery of the consignment from the Transport Operator
      (because the buyer does not retire the documents or because of any
      other reason), the Transport Operator shall deliver the goods
      unconditionally to the Bank on payment of the normal freight and

RFA No.7/02                                                          Page 3 of 5
       storage charges only in connection with the consignment in
      question, without claiming any lien on the goods in respect of any
      monies due by the consignor or the consignee to the Transport
      Operator on any account whatsoever." (Emphasis argued).

5.            On the basis of the aforesaid clauses and the fact that plaintiff

bank admits having not paid the freight charges, it is pleaded that not only

no decree for the amount claimed with respect to the loan granted to

defendant No.1 could be passed, further, the appellant/transporter was not

even bound to return the goods unless the freight and demurrage charges

were paid.      It is also argued simultaneously that the liability of the

transporter cannot be to the extent of credit facility granted to respondent

No.2/defendant No.1/principal borrower, as has been decreed by the trial

Court, but, only to the extent of the value of the goods which were in control

and possession of the appellant/transporter.


6.            I find considerable merit in the arguments as advanced on behalf

of the counsel for the appellant. The admitted facts which emerge from the

record and from the deposition of the witness of the bank, besides the

affirmative evidence led on behalf of the appellant/transporter, are that

freight and demurrage charges were never paid to the appellant/transporter.

Therefore, the appellant/transporter was not bound to even return the goods

either to the consignor or to its successor in interest i.e. the plaintiff bank.

Also, in any case, the transporter surely cannot be liable for the entire credit

facility which is granted to a borrower by the bank and the liability of the

transporter at the very best can be for the value of the goods and which also

RFA No.7/02                                                            Page 4 of 5
 in the present case is not there because the freight charges and demurrage

charges of the appellant/transporter admittedly have not been paid.


7.            In view of the above, I accept the appeal.           The impugned

judgment and decree dated 3.10.2001 is accordingly set aside so far as the

appellant     is   concerned.   Suit   will   stand   dismissed   as   against   the

appellant/transporter. Parties are left to bear their own costs. Decree sheet

be prepared. Since the appellant had deposited the amount pursuant to the

impugned judgment and decree in this Court and which amount has been

withdrawn by the respondent No.1 bank, the appellant will be entitled to

restitution in accordance with law with respect to the amount which has

been withdrawn by the respondent No.1 bank from this Court on furnishing

the bank guarantee. Trial Court record be sent back.




JULY 04, 2011                                         VALMIKI J. MEHTA, J.

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