Delhi High Court
Handicraft And Handloom Export ... vs Unisilk Ltd. Rm And Ors. on 9 July, 2012
Author: Reva Khetrapal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ (1) CS(OS) 2340/2001 and IA No.1537/2004
HANDICRAFT AND HANDLOOM EXPORT
CORPORATION OF INDIA LTD. ..... Plaintiff
Through: Mr. Vivek Singh and Ms. Madhu
Sharan, Advocates.
versus
UNISILK LTD. RM AND ORS. ..... Defendants
Through: Mr. R.K. Joshi, Advocate for D-7.
+ (2) CS(OS) 480/2008 and IA No.3621/2010
M/S. OVERSEAS TRADING CORPORATION ..... Plaintiff
Through: Mr. Vibhor Garg, Advocate
versus
HANDLOOMS AND HANDICRAFTS EXPORT
CORPORATION OF INDIA LTD. ..... Defendant
Through: Mr. Vivek Singh and Ms. Madhu
Sharan, Advocates.
% Date of Decision : July 09, 2012
CS(OS) No.2340/2001 and CS(OS) No.480/2008 Page 1 of 50
CORAM:
HON'BLE MS. JUSTICE REVA KHETRAPAL
JUDGMENT
: REVA KHETRAPAL, J.
1. Since commonality of facts and law are involved in the
aforesaid suits, both the suits are being decided by this common
judgment.
2. The essential facts as set out in CS(OS) No.2340/2001 are not
in dispute and are as delineated below.
3. On 08.10.1998, the Director General of Foreign Trade, decided
vide Government Notification No.47 (RE-98)/97-02 to allow the
import of mulberry raw silk without import licence by six agencies
which included the Handicraft and Handloom Export Corporation of
India Limited (hereinafter referred to as "HHEC"). In view of the
permission granted by the Government of India for import of raw
mulberry silk without import licence, the HHEC was approached by
the defendant No.8, M/s. Overseas Trading Corporation (hereinafter
referred to as "Overseas Trading") for the purchase of raw mulberry
silk.
4. The defendant No.1, Unisilk Limited RM is a company based
in Hong Kong and deals with the export of mulberry raw silk. The
plaintiff placed an order of import of 1,240 bales of mulberry raw silk
on Unisilk Limited RM (hereinafter referred to as "Unisilk") and out
of 1,240 bales of raw mulberry silk, import of 311 bales of mulberry
raw silk of Korean origin was contracted with defendant No.1 vide
contract No.US/6047/98 and US/6055/98 dated 27.10.1998, which
are the subject matter of dispute in this suit. HHEC imported the said
goods from Unisilk on Cost Insurance Freight (C.I.F.) basis. The
value of the goods in terms of US Dollars was 1,74,899.57.
5. The subject matter of the aforesaid contract was insured with
the defendant No.2, M/s. China Merchants Insurance Company
Limited, Hongkong (hereinafter referred to as the "Insurance
Company"). The sum insured for the aforesaid goods in US Dollars
was 1,92,390 vide three policy numbers viz. MCG-3033-012851,
MCG-3033-012852 and MCG-3033-012853. On 18.03.1999, the
aforesaid three insurance policies were further extended upto
15.04.1999. The defendant No.3 is a claim settling agent of the
defendant No.2/Insurance Company. The defendant No.4 is the
survey agent of the defendant No.3. The defendant No.5 is a
company engaged in the shipping business and the aforesaid goods
were brought to India by its ship Ever Delux in container No.UGMU-
8660253/20'. The defendant No.6 is an Indian agent of the defendant
No.5. The defendant No.7 is a corporation of Government of India
and carries on the business of providing/procuring the container to
exporters and importers for export and import of goods and also
provides the warehouse facility for exported and imported goods.
The defendant No.8 is engaged in trading of silk products and its
import and export, and had placed the order of purchase of 1240 bales
of imported mulberry silk of Korean origin on the plaintiff.
6. It is the case of HHEC that HHEC was acting as canalizing
agency and the Insurance Company was to provide the details of
quality and quantity of raw silk to be imported by HHEC. A contract
was entered into between the HHEC and Overseas Trading, that is,
the plaintiff and the defendant No.8 for the supply of imported raw
mulberry silk to Overseas Trading. HHEC had back to back buy
agreement with Overseas Trading as raw mulberry silk was imported
on the basis of the order placed by the said Overseas Trading.
7. On 22.10.1998, the sale contract was forwarded by the
defendant no.1 - Unisilk to HHEC whereby Unisilk had agreed to sell
mulberry silk of Korean origin to HHEC and this was given shape in
the form of contract Nos.US/6041/98 and US/6042/98. Subsequently,
one more sale contract was forwarded on 27.10.1998 by Unisilk to
HHEC by which the Unisilk agreed to sell mulberry raw silk of
Korean origin and the terms of contract were contained in contract
Nos.US/6047/98, US/6055/98, US/6056/98 and US/6057/98.
8. It is further the case of HHEC that on 27.10.1998, the
defendant No.8, Overseas Trading placed orders for the supply of
imported mulberry silk on HHEC. The import orders amongst other
indents contained indent No.US/6047/98 dated 27.10.1998 for 260
bales of 30 kgs. each and indent No.US/6055/98 dated 27.10.1998 for
51 bales of 30 kgs. each, contained in sale contract forwarded by
Unisilk to HHEC.
9. The plaintiff-HHEC by fax message dated 30.10.1998 sent its
acceptance of the contract for import of mulberry silk to Unisilk and
the contract, inter alia, contained indent No.US/6047/98 dated
27.10.1998 for 260 bales of 30 kg. each and indent No.US/6055/98
dated 27.10.1998 for 51 bales of 30 kg. each of mulberry silk.
Thereafter, the defendant No.1, Unisilk by fax message bearing
reference No.11/90914/98 dated 5th November, 1998 informed HHEC
that mulberry silk forming part of indent No.US/6047/98 and indent
No.US/6055/98, both dated 27.10.1998, had been shipped to India on
30th October, 1998.
10. By another fax message dated 12.11.1998, the defendant No.1,
Unisilk informed the plaintiff-HHEC the document dispatch details
for the 311 bales of mulberry raw silk shipped to India by the ship
EVER DELUX. On the following day, i.e., on 13.11.1998, the
HHEC received through their banker-State Bank of India documents
containing Bill of Lading dated 29.10.1998 issued by Speeder
Container Lines S.A. (the defendant No.5) and invoices of Unisilk
dated 29.10.1998 (six in number), the details of which are as under:-
Sl. Bill of Lading Quantity Invoice No.
No. (Bales)
1. HK/New-14992 51 UL/6137/98
2. HK/New-14987 52 UL/6136/98-A
3. HK/New-14988 52 UL/6136/98-B
4. HK/New-14989 52 UL/6136/98-C
5. HK/New-14990 52 UL/6136/98-D
6. HK/New-14991 52 UL/6136/98-E
11. The plaintiff asserts that on 29.11.1998, the raw mulberry silk
imported by it reached at I.C.D. Tughlakabad, New Delhi in container
No.UGMU-8660253/20'. The Custom examined 10 per cent contents
of the container on 15.03.1999 after cutting the seal, and again on
18.03.1999, on request, the goods were examined 100 per cent by the
Custom, and on such examination only 235 bales were found as
against the invoice quantity of 311 bales of mulberry raw silk. The
sum and substance of the report are reproduced in the plaint as
under:-
Bill of Entry Quantity Found Deficiency as
against quantity
indicated (Bale)
206437/10-Feb-99 As per invoice Nil
206438/10-Feb-99 38 bales as against 52 14
of invoice quantity
206440/10-Feb-99 26 bales as against 52 26
of invoice quantity
206441/10-Feb-99 28 bales as against 52 24
of invoice quantity
206446/10-Feb-99 As per invoice Nil
206447/10-Feb-99 40 bales as against 52 12
of invoice quantity
12. It is further the case of the plaintiff-HHEC that the container
was thereafter examined by M/s. B. Ghose and Company Limited,
I.C.D. Tughlakabad, New Delhi on 19.03.1999 and it was reported by
them in their worksheet No.4508 that the subject container had
arrived at I.C.D. Tughlakabad, New Delhi with its seal intact and only
235 bales had been found.
13. The plaintiff-HHEC thereupon requested for Destuffing Survey
of the container UGMU 8660253/20' and on the instruction of the
shipping line, the defendant No.6, M/s. Greenways Shipping Agency,
acting as their official surveyors, Master Marine Services Private
Limited carried out a detailed survey on 19.03.1999 in the presence of
the Custom House Agent of Consignee. In its Destuffing Report
dated 21.03.1999, it stated that the total quantity received was 235
bales and net shortage was of 76 bales. It confirmed line seal intact
with no evidence of tampering. The plaintiff-HHEC vide fax
message on 23.03.1999 informed the Insurance Company (the
defendant No.2) about shortage of 76 bales of mulberry raw silk and
the defendant No.4-M/s. Tata Tea Limited (CEEMIS SURVEY
AGENT) was also informed.
14. It is further the case of the plaintiff-HHEC that the defendant
No.7-M/s. Container Corporation of India Limited on 24.03.1999
issued a certificate that the container had been received with the
original seal intact and as per its tally only 235 bales were found and
it will not accept the liability for short landing.
15. The defendant No.8-Overseas Trading, the purchaser of the
imported raw mulberry silk from HHEC also contacted M/s. Tata Tea
Limited (CEEMIS SURVEY AGENT) vide their letter dated
01.04.1999 that 76 bales were missing from the container and
registered a claim with them and along with their claim, copies of
three insurance cover policies, copies of six invoices and six bills of
lading, also forwarded the following documents:-
(a) Certificate of the Customs Department as recorded on
the back of Bill of Entry.
(b) Inspection Report of the Shipping Company Surveyor.
(c) Inspection Report of the Container Corporation.
(d) Details of claim of U.S. $ 47,490.44 on account of loss
of 76 bales of mulberry silk.
16. The Tata Marine Agencies, agent of Tata Tea Limited vide
their fax No.INS:GEN:471/99 dated 7th April, 1999 replied to the
Overseas Trading (the defendant No.8) that they were not nominated
as the claim settling agent of the defendant No.2/Insurance Company
in the insurance policies in question and that the defendant No.3 was
the claim settling agent and requested the defendant No.8-Overseas
Trading to submit the claim documents direct to the defendant No.3-
CEEMIS.
17. On 22.04.1999, the defendant No.1-Unisilk informed the
HHEC vide letter bearing reference No.11/100341/99 that it had
loaded the entire quantity of 311 bales. Left with no option, the
HHEC by registered letter on 26.05.1999 lodged the claim of US $
47,717.44 with the Insurance Company [the defendant No.2], M/s.
Tata Tea Limited [CEEMIS SURVEY AGENT (the defendant No.4)]
and Speeder Container Line S.A. [the defendant No.5 through whom
the goods were dispatched] with regard to the shortage of 76 bales of
mulberry raw silk, out of 311 bales shipped vide Bill of Lading
No.HK/NEW/14987 to HK/NEW/14992 dated 29.10.1998, shipped in
container No.UGMU 8660253/20', insured vide policy Nos.MCG-
3033-012851, MCG-3033-012852 and MCG-3033-012853.
18. Consequent to the lodging of the claim by the plaintiff-HHEC,
the defendant No.3/CEEMIS, the claim settling agent of the defendant
No.2/Insurance Company, vide its letter dated 11.06.1999 in reply to
the letter of HHEC dated 26.05.1999 stated that they were the claim
settling agent of M/s. China Merchant Insurance Company Limited
(the defendant No.2), but they repudiated the claim on the ground that
the original seal of the container was intact at the time of the delivery
of the container and, therefore, the loss had not occurred due to the
operation of the external fortuity during the insured transit and it was
due to short shipment. In the meantime, the Custom informed the
HHEC vide letter dated 05.07.1999 that on the basis of the order
dated 19.06.1999 of Deputy Commissioner of Custom, the custom
duty on 76 bales worth ` 6,56,052 (Rupees Six Lacs Fifty Six
Thousand and Fifty Two Only) was being refunded as a shortage of
76 bales had been found.
19. On 05.07.1999, the HHEC informed the defendant No.3-the
claim settling agent of the defendant No.2-Insurance Company vide
its fax bearing reference No.HHEC/SILK/OTC that a certificate had
been issued by M/s. Modern Century Forwarding Limited that Unisilk
had loaded complete material as per invoice and, therefore, the
chances of short loading did not arise. On 06.03.2000, the defendant
No.2-Insurance Company by its letter addressed to Overseas Trading
Corporation further repudiated the claim of HHEC and closed the file
on the frivolous ground that the defendant No.4, the survey agent of
the defendant No.3 had not been requested for the survey by the
defendant No.8-Overseas Trading.
20. The plaintiff-HHEC by its fax message dated 27.07.2000
informed the defendant No.2-Insurance Company that at no point of
time, the Insurance Company had suggested second survey by its
agent and, therefore, it could not be treated as material breach. The
defendant No.2-Insurance Company, by fax message dated
10.08.2000 again repudiated the claim of the plaintiff-HHEC and also
refused to accept the container listing and claimed that cargo interest
had not taken any positive action in this respect. The plaintiff-HHEC
rebutted the contention of the Insurance Company vide fax message
dated 01.09.2000, stating that the surveyor M/s. Tata Marine
Agencies (the agent of defendant No.4) was contacted about the
shortage of 76 bales of mulberry silk and on information of Tata
Marine Agency, the defendant No.3 was contacted. The failure to
conduct survey on the part of the surveyor therefore could not be held
against the plaintiff-HHEC, inasmuch as the request was made as
early as in March, 1999 itself.
21. By its fax bearing reference No.GF-2486 C dated 11.09.2000
Unisilk requested the defendant No.2-Insurance Company to settle
the claims of the plaintiff-HHEC and copy of the said communication
was forwarded by Unisilk to HHEC, but to no avail. Ultimately, on
20.01.2001, the plaintiff-HHEC served notice on defendant
No.2/Insurance Company for settlement of claim by 15th February,
2001 stating that failure to do so would result in filing of a recovery
suit. The plaintiff-HHEC vide their fax message bearing reference
No.HHEC/SILK/OTC dated 08.05.2001 also informed Unisilk that
311 bales of mulberry raw silk had been imported on Cost Insurance
Freight basis and requested Unisilk to provide the documentary
evidence in support of shipment of 311 bales, for which the payment
had been made.
22. The plaintiff-HHEC alleges that in the aforesaid circumstances,
76 bales of mulberry silk valued at approximately US $ 47,717.44
were lost either due to short shipment or due to pilferage during
transit or due to loss at the warehouse of the defendant No.7, and
thereby the plaintiff-HHEC had suffered loss. Payment had been
made by the plaintiff-HHEC to Unisilk for 311 bales of mulberry silk
and it was the duty of Unisilk to compensate the plaintiff-HHEC for
the aforesaid shortage of 76 bales of mulberry raw silk. The aforesaid
goods were insured with the defendant No.2-Insurance Company and
the said insurance covered "all risk upto Varanasi U.P. India
including warehouse to warehouse", and thus the Insurance
Company was liable to reimburse the HHEC for the loss caused to it
under the policies issued by it in favour of the HHEC. The HHEC
further alleges that the defendant No.4, which is the claim setting agent of
the defendant No.3 and the defendant No.3, which is the claim
settling agent of the defendant No.2-Insurance Company, were under
a contractual obligation to carry out survey for any loss claimed and
the contract itself speaks about the role of the defendant No.4. The
defendant No.4 was well informed by the HHEC to conduct the
survey but it ignored the request of HHEC. Thus, all the defendants
have performed their duty negligently and thereby caused loss to the
HHEC and are, therefore, jointly and severally liable to pay a sum of
U.S. $ 47,717.44 (equivalent to approximately ` 22,89,960/-) to the
HHEC with interest @ 18% per annum on the aforesaid amount from
18.03.1999 when the shortage of 76 bales of mulberry silk was
discovered by the Custom Department. The defendants having failed
to pay the aforementioned amount to the plaintiff-HHEC, the present
suit was instituted by the plaintiff on 26/09/2001 seeking recovery of
Rs.33,20,442/- (Rupees thirty three lakhs twenty thousand four
hundred and forty two only) in favour of the plaintiff and against the
defendants No.1 to 7 alongwith future interest at the rate of 18% per
annum from 18.9.2001 till the realization of the entire decretal
amount.
23. The plaintiff served the defendants with summons of the filing
of the suit through publication in international newspapers apart from
ordinary mode of service. The defendants No.1 to 3, 5 and 6 did not
appear despite service upon them by publication and were proceeded
ex-parte in default of appearance on 08.02.2006.
24. The defendants No.4, 7 and 8 filed their respective written
statements. The plaintiff filed replications to the written statements of
the defendant No.4 and the defendant No.7. On 7.9.2006, the
following issues were framed for adjudication:-
"1. Whether the plaintiff is entitled to the suit amount?
OPP
2. Whether the plaintiff is entitled to interest as
claimed? OPP
3. Whether the defendants are jointly and severally
liable to pay the amount claimed by them? OPD
4. Relief."
25. On 22.08.2008, an application filed by the defendant No.4 for
deletion of its name from the array of parties was dismissed being IA
No.12327/2006 and at the behest of the defendant no.4, the following
additional issues were framed for consideration:-
"1. Whether defendant no.4 is a proper and necessary
party to the suit and the suit is bad for misjoinder
of parties? OPP
2. Whether there is any cause of action against the
defendant no.4 and in favour of the plaintiff? OPD
3. Whether the insurance policy is properly stamped
and if not its effect? OPP"
26. By a subsequent order dated 11.08.2009, however, a review
application filed by the defendant no.4 (being IA No.12739/2008)
seeking recall of the order dated 22.08.2008 was allowed by this
Court on the ground that there was no privity of contract between it
and the plaintiff, whose claim is premised upon the alleged
negligence or wrongful performance of the agreement by defendants
Nos. 1 to 3. It was held that the fourth defendant was neither a
necessary nor proper party and in the circumstances, the review
application deserved to be allowed. Consequently, the defendant no.4
was deleted from the array of parties.
27. In the course of trial, the plaintiff-HHEC examined two
witnesses, namely, PW-1, Mr. Nirmal Sinha, General Manager of the
HHEC and PW-2, Mr. V.K. Anand, Ex-Marketing Manager of the
HHEC, who tendered in evidence their respective affidavits by way of
evidence as Exhibit PW-1/A and Exhibit PW-2/A.
28. In the course of his testimony recorded on 30 th October, 2009,
Mr. Nirmal Sinha tendered in evidence his affidavit Exhibit PW-1/A
and the documents enclosed therewith exhibited as Exhibit PW-1/1 to
Exhibit PW-1/28. The witness was cross-examined by Sh. R.K. Joshi,
the learned counsel for the defendant No.7 on 30th October, 2009 and
subsequently on 6th November, 2009.
29. The statement of PW-2, Mr. V.K. Anand was recorded on
3.5.2010, who tendered his affidavit in evidence Exhibit PW-2/A
relying upon the documents already exhibited as Exhibit PW-1/1 to
Exhibit PW-1/28. PW-2, Mr. V.K. Anand was also cross-examined
at length by the learned counsel for the defendant No.7.
30. The defendants did not choose to adduce any evidence in
rebuttal except the defendant No.7-Container Corporation of India
Limited. The defendant No.7 adduced the evidence of Shri Radhey
Shyam, Sr. Manager (Commercial) of the defendant No.7, who
appeared in the witness box as D-7W1. and tendered his affidavit of
evidence as Exhibit D-7W1/A relying upon the document Exhibit D-
7/1 (already exhibited as Exhibit PW1/D1).
31. On scrutinizing the oral and documentary evidence on record
and after hearing the counsel for the plaintiff, the defendant no.7 and
the defendant No.8, the Court is of the opinion that the following
documents and the facts emerging therefrom stand established on the
record from the testimonies of the plaintiff's witnesses, namely, PW1-
Mr.Nirmal Singh and PW2-Mr. V.K. Anand:-
1. Plaintiff-HHEC vide Govt. Notification No. 47 (RE-
98/97-02 dated 8.10.1998 was allowed to import
mulberry raw silk without import licence (Exhibit
PW1/2).
2. Defendant No.8-Overseas Trading, a partnership firm
placed the order of purchase of imported mulberry silk of
Korean origin by an agreement dated 27.10.1998 entered
into between the plaintiff and defendant no.8 (Exhibit
PW1/5)
3. Plaintiff placed order of 1240 bales of mulberry raw silk
on defendant no.1-Unisilk and contract of import of 311
bales of mulberry raw silk was contracted with defendant
no.1-Unisilk vide Ref. no. US/6047/98 (for 260 bales) &
US/6055/98 (for 51 bales) dated 27.10.1998, which is the
subject matter of the dispute. The said goods were
imported on Cost Insurance Freight (CIF) basis. (Exhibit
PW1/6).
4. Defendant No.2- Messrs China Merchants Insurance
Company Limited was the Insurance Company at Hong
Kong with whom the subject matter of aforesaid contract
of 311 bales was insured for US $ 1,92,390. Insurance
policy nos. MCG-3033-012852 for 156 bales, MCG-
3033-012851 for 104 bales and No. MCG-3033-012853
for 51 bales dated 27.10.1998 were issued by the
Defendant No.2 (Exhibit PW1/4).
5. Plaintiff-HHEC vide fax message dated 30.10.1998 sent
its acceptance for the contract of import of mulberry silk
to defendant No.1 (Exhibit PW1/7).
6. Defendant No.1 informed the plaintiff vide fax message
dated 5.11.1998 that the goods have been shipped to
India on 30.10.1998 (Exhibit PW1/8 & PW1/9).
7. Plaintiff on 13.11.1998 received the copy of original
documents viz. invoices, packing/weight list, bill of
lading etc. from the defendant No.1 (Exhibit PW1/10).
8. The insurance policy cover was extended to 15.04.1999
by defendant No.2 (Exhibit PW1/11).
9. The aforesaid goods shipped from Hong Kong reached
I.C.D., Tughlakabad, New Delhi, warehouse of defendant
No.7 in Container no. UGMU-8660253/20' on
29.11.1998.
10.The Custom examined 10% contents of the container on
15.03.1999 after cutting the seal and again on 18.03.1999
on request 100% goods were examined by Custom and
only 235 bales were found against the invoice quantity of
311 bales. Thus there was shortage of 76 bales. (Bill of
entries showing shortfall of 76 bales are Exhibit
PW1/12).
11.The container was further examined by M/s B. Ghose &
Co. on 19.03.1999 and as per its report the container
arrived at ICD, Tughlakabad, N. Delhi with seal intact
and only 235 bales were found. (Exhibit PW1/13).
12.Plaintiff requested for Destuffing Survey of the
container. Defendant No.6 through its Surveyor Master
Marine Services Pvt. Ltd. carried survey in presence of
Custom Authorities and gave its Destuffing Report dated
21.3.1999 stating that there was shortage of 76 bales and
confirmed that line seal was found intact. (Exhibit
PW1/14).
13.Plaintiff vide fax dated 23.3.1999 informed the defendant
no.2 (copy to defendant Nos. 1, 4 & 8) that only 235
bales were delivered against 311 bales (Exhibit
PW1/15).
14.Defendant No.7 issued a certificate dated 24.3.1999 to
the effect that the container was received with seal intact
and it will not accept any liability for short landing of
goods (Exhibit PW1/16).
15.Defendant No.8 vide their letter dated 1.4.1999 raised the
claim with defendant No.4, the survey agent of defendant
No.3, providing all the documents (Exhibit PW1/17).
16.Defendant No.4 vide letter dated 7.4.1999 informed
defendant No.8 that they are not the settling agent of the
defendant No.3 (Exhibit PW1/18).
17.Defendant No.1 vide fax dated 22.4.1999 confirmed that
they had loaded the entire quantity of 311 bales (Exhibit
PW1/19).
18.Plaintiff lodged the claim with defendant No.2 vide letter
dated 26.5.1999 (Exhibit PW1/20).
19.Defendant No.3 vide letter dated 11.06.1999 repudiated
the insurance claim raised by the plaintiff (Exhibit
PW1/21).
20.Custom department vide order dated 19.06.99 refunded
the custom duty of Rs.6,56,052/- on account of short
shipment of 76 bales of mulberry silk. (Exhibit
PW1/22).
21.Plaintiff vide letter dated 05/07/1999 confronted the
defendant No.3 with their stance that they do not have
any liability and provided them the certificate showing
311 bales were dispatched (Exhibit PW1/23).
22.Defendant No.2 vide their letter dated 6.03.2000 refused
to entertain the insurance claim and closed their file
(Exhibit PW1/24).
23.Plaintiff vide their letter dated 27.7.2000 again asked the
defendant No.2 to settle the claim (Exhibit PW1/25).
24.Defendant No.2 vide fax dated 10.8.2000 again
repudiated the claim of plaintiff (Exhibit PW1/26).
25.Plaintiff vide fax dated 1.9.2000 rebutted the contention
of defendant No.2 (Exhibit PW1/27).
26.Defendant No.1 vide its fax dated 11.09.2000 requested
the defendant no.2-Insurance Company to settle the claim
of the plaintiff (Exhibit PW1/28).
27.Plaintiff served notice dated 20.1.2001 on the defendant
no.2 with a copy marked to defendant No.1 that a suit for
recovery will be instituted if the claims are not settled by
15.02.2001.
28.Present Suit for recovery was filed on 26.09.2001.
32. Both the plaintiff's witnesses, PW1 and PW2, as already stated
were subjected to cross-examination by the learned counsel for the
defendant No.7, which shall be adverted to at the relevant time. The
defendant No.7, as already stated, in the course of its evidence
examined Mr. Radhey Shyam, Senior Manager (Commercial), who
tendered his affidavit in evidence Exhibit D-7W1/A. The said
witness in his affidavit stated that M/s. Greenways Shipping Agency
had approached the Mumbai office of defendant No.7 for carriage of
container No. UGMU 8660253-20 from Mumbai to ICD,
Tughlakabad, Delhi. The defendant No.7 had issued an Inland Way
Bill No.692995 dated 24.11.1998, which was exhibited as Exhibit
D7/1. The goods were transported from Mumbai to Delhi on the
basis of the said Inland Way Bill, which carried the endorsement
"said to contain", meaning thereby that the particulars mentioned in
the said Inland Way Bill were put on the basis of the information
supplied by M/s Greenways Shipping Agency. The defendant No.7,
he stated, neither weighed the container nor any inspection of the
goods in the container was carried out by defendant No.7 at Mumbai.
The container was having the one time original seal. The container
was handed over with the said original seal at Mumbai by M/s
Greenways Shipping Agency. The container was not customs cleared
at Mumbai as the customs clearance formalities were to be completed
at Delhi.
33. D-7W1, Mr. Radhey Shyam further stated in his affidavit in
evidence that the goods were examined by the customs after cutting
the one time original seal on 15.3.99 and again examined on 18.3.99
when 235 bales were found in the container. Neither the defendant
No.7 nor its representative had witnessed the stuffing of 311 bales in
the container. The container had the original seal intact at the time of
the cutting of the seal on 15.03.1999 and as such the defendant no.7
was not responsible for the alleged loss, if any, of the goods. There
was no question of tampering with the goods at the time of handing
over of goods for customs examination as the container was having
the original seal intact and no loss had taken place at ICD,
Tughlakabad.
34. In the course of his cross-examination, D-7W1, Mr. Radhey
Shyam stuck to his stance that the present case was not a case of
pilferage but was a case of short landing. On a query put to him by
the counsel for the plaintiff, he stated that the seal of the container
had been cut in the presence of representatives of the defendant No.7,
Customs, Importers and Security Staff. Thereafter, the goods were
examined by the Customs Authorities and thereafter they issued
Customs Out of Charge and on the basis of Customs Out of Charge
and delivery order issued by the shipping company, the defendant
No.7 had issued the gate-pass for the physical removal of the goods.
35. Mr. R.K. Joshi, the learned counsel for the defendant No.7
placed strong reliance on the original Inland Way bill and in
particular to the following terms and conditions contained therein:-
"1. This Inland Way Bill is prima facie evidence of
the receipt by CONCOR from the Consignor in
apparent good order and condition, except as
otherwise noted, of the total number of containers,
packages or other units specified on the face
thereof.
2. The Inland Way Bill is given by CONCOR for
the containers to be carried by it and must be given
up at destination by the consignee at the time of
taking delivery.
3. This Inland Way Bill is issued subject to the
conditions and liabilities as specified in the
Railways Act, 1989.
4. The Consignor must accept responsibility for all
particulars furnished in respect of Cargo tendered
by him for stuffing in container and carriage by
CONCOR. The Consignor is deemed to have
indemnified CONCOR against any damage or loss
suffered by it by reason of incorrect or incomplete
particulars furnished by him in regard to the
Cargo.
5. Notice of loss or damage must be given to
CONCOR and destination zonal railway (in case
of transit involving rail haul) at the time of
delivery."
36. Learned counsel submitted that the aforesaid Inland Way Bill
had been issued subject to the conditions and liabilities as specified in
the Railways Act, 1989 as evidenced by Clause 3 of the said bill
reproduced hereinabove. The plaintiff in the instant case did not give
any notice whatsoever as required by Section 106 of the Railways
Act, 1989 within six months of the entrustment of the goods to the
defendant No.7 and, thus, the present suit against the defendant No.7
was not maintainable. He emphasized that D-7W1, Mr. Radhey
Shyam in his affidavit had stated on oath that no notice under Section
106 of the Railways Act had been given by the plaintiff and the
witnesses had not been cross-examined at all on this crucial aspect.
Not even a suggestion was put to him that such notice was given by
the plaintiff to the defendant No.7 and, thus, it stood established on
record that the plaintiff had not complied with the mandatory
provisions of Section 106 of the Railways Act, 1989 before institution
of the present suit.
37. Mr. Joshi also laid great emphasis on the affidavit in evidence
of D-7W1 on two other aspects of the matter. He emphasized that the
witness in paragraph 5 of his said affidavit had categorically stated
that the original Inland Way Bill carried the endorsement "said to
contain" and further stated that the meaning of the words "said to
contain" is that the particulars mentioned in the said Inland Way Bill
were on the basis of the information supplied by M/s. Greenways
Shipping Agency. The defendant No.7 had neither weighed the
container nor taken inspection of the goods in the container at
Mumbai. The container was having the "one time original seal" and
was handed over with the said original seal at Mumbai by M/s.
Greenways Shipping Agency. The said original seal was intact at the
time of the cutting of the seal by the Customs on 15.03.1999.
38. Mr. Joshi emphasized that D-7W1, Mr. Radhey Shyam was not
at all cross-examined by the plaintiff either with regard to the
endorsement "said to contain" on the Inland Way Bill or with regard
to the original seal being intact at the time of the cutting of the seal by
the Customs at Delhi. He also placed reliance on the cross-
examination of PW1, Mr. Nirmal Sinha, who admitted that the Bill of
Lading was issued by the defendant no.5 with the remarks "Shippers
Load and Count". Learned counsel also referred to the statement of
PW-2, Mr. V.K. Anand, who in the course of cross-examination
admitted that the container could not have been opened without
cutting the original seal. He submitted that D-7W1 had categorically
stated that the seal of the container had been cut in the presence of the
representatives of the defendant No.7, Customs, Importers and
Security Staff and there was nothing to suggest that the statement of
the witness was false. Learned counsel also referred to the Joint
Survey Report (Exhibit PW1/14) to submit that the categorical
finding of the surveyor was that it was a case of short shipment and
not tampering. Thus, the defendant No.7 was not at all liable.
39. Reference was made by Mr. Joshi to the decision of the Madras
High Court in Nippon Yeesen Kaisha Ltd. V. Union of India and
Another AIR 1987 MADRAS 12 where, in a suit of damages for
short delivery of goods, the carrier of goods was held not liable for
shortage in view of the endorsement "said to weigh" found in the
Bill of Lading. The said endorsement, it was held, could only mean
that there was no admission or acceptance of the weight by the
carriers, as declared by the shippers or consignors. Such an
endorsement could not be taken note of as conclusive proof of weight
of the goods shipped. If there is a complaint of short delivery, weight
wise, the burden rests squarely on the plaintiff to place acceptable and
convincing evidence of the actual weight of the goods shipped. The
Madras High Court referring to its earlier judgment in M/s. T.S.
Company Ltd. Bombay Vs. Food Corporation of India AIR 1983
Madras 105 held that the plaintiffs had not discharged their burden of
proof in view of the endorsement "said to weigh" in the bill of lading
which had been interpreted in the case of T.S. Company (Supra) as
follows:-
"............In other words, it would mean that the
particulars of weight entered in the bills of lading
were in accordance with the figures given by the
shipper, but so far as the matter is concerned, he
did not give any assurance that those particulars
had been checked and found to be correct. Once
such a conclusion is reached, then it follows that it
is for the respondent to prove that the rice bags
that were loaded at Bangkok were of the same
weight as had been entered in the bills of lading.
Only after such proof is adduced, the owner of the
vessel can be called upon to account for the
shortage. Since such proof has not been adduced
by the respondent in this case, we have to hold that
the appellants cannot be called upon to account
for the shortage in the weight contents of the
bags."
40. In so far as the defendant No.7 is concerned, on the basis of the
testimony of D-7W1 and the original Inland Way Bill (Exhibit D-
7W1/A), this court has no hesitation in arriving at the conclusion that
it is not possible to fasten the liability on the defendant No.7 as
carriers in view of the endorsement "said to contain" found in the
bill of lading in the instant case. As held in the case of Nippon
Yeesen Kaisha (Supra), the aforesaid words indubitably mean that
there was no admission or acceptance of the weight by the carriers, as
declared by the shippers or consignors. The plaintiff's complaint of
short delivery weight-wise is, therefore, not relatable to the defendant
No.7, in that, the burden rests squarely on the plaintiff to prove by
adducing evidence, the actual weight of the goods shipped. The
plaintiff indisputably has not discharged the burden of proof placed
upon it in this regard. The defendant No.7, therefore, cannot be
mulcted with the liability of short delivery more so when there is
evidence on record to suggest that the one time original seal was
found intact by the Customs at the time of inspection of the goods.
The fact that no notice under Section 106 of the Railways Act was
given to the defendant No.7 by the plaintiff, despite the fact that
Clauses 3 and 5 of the "Inland Way Bill" made it mandatory that
such a notice be issued and given to CONCOR and the destination
zonal railway at the time of delivery as notice of loss or damage,
further fortifies the case of the defendant No.7 that no liability can be
fastened upon it at this belated stage.
41. As noticed above, the defendants No.1, 2, 3, 5 and 6 did not
contest the case and the defendant No.4 was deleted from the array of
parties by the order of this Court dated 11.08.2009. The evidence
adduced by the plaintiff and the defendant No.7, however, clearly
points to the fact that there was short delivery of 76 bales to the
defendant No.8 which was due to short-shipment. The plaintiff has
failed to establish that the cause of the short delivery was either due to
pilferage during transit or due to loss at the warehouse of the
defendant No.7. Thus, the shortage of 76 bales is directly attributable
to the defendant No.1-Unisilk, which had received payment of 311
bales of mulberry raw silk of Korean origin but had delivered only
235 bales of raw silk, resulting in a shortfall of 76 bales. The plaintiff
is, therefore, entitled to receive a sum of US $ 47717.44 as claim
amount for the shortage of said 76 bales. The defendant no.1 is the
consignor of the indented material, the defendant No.2 is the
Insurance Company based at Hong Kong with which the subject
matter was insured. The defendant No.3 is the claim settling agent of
the defendant No.2. The defendant No.5 are the shippers through
whom the consignment was brought to India and the defendant No.6
is an Indian agent of the defendant No.5, which carried out the
inspection of the container on the instructions of the defendant No.5
and issued survey report. Thus, all the defendants must be held
jointly and severally liable to reimburse the plaintiff for the loss
occasioned to it due to short shipment of 76 bales of mulberry raw
silk.
42. In view of the aforesaid, issue No.1, 2 and 3 are decided in
favour of the plaintiff and against the defendants. Resultantly, a
decree in the sum of Rs.33,22,422/- (Rupees thirty three lakhs twenty
two thousand four hundred and twenty two only) is passed in favour
of the plaintiff and against the defendant Nos. 1, 2, 3, 5 and 6
alongwith pendente lite and future interest at the rate of 18% per
annum from the date of the institution of the suit, that is, 26.09.2001
till the realization of the entire decretal amount.
CS(OS) No. 480/2008
43. By way of this cross-suit filed by Overseas Trading [defendant
No.8 in CS(OS) No.2340/2001], against HHEC [the plaintiff in
CS(OS) No.2340/2001], recovery of a sum of Rs.77,34,519/- (Rupees
Seventy seven lakhs thirty four thousand five hundred and nineteen
only) with pendente lite and future interest thereon at the rate of 18%
per annum from the date of the institution of the suit till the recovery
of the decretal amount is sought for in favour of the plaintiff and
against the defendant for short delivery of 76 bales of mulberry raw
silk on the basis of a contract entered into between the parties on
27.10.1998.
44. The facts being identical to the fact in CS(OS) No. 2340/2001
do not bear repetition.
45. Suffice it to say that the suit which was instituted on 12th
February, 2008 by Overseas Trading was contested by the defendant-
HHEC by filing a written statement denying its liability to pay the
suit amount and submitting that the defendant had made payment to
M/s Unisilk Limited for the import of 311 bales of mulberry raw silk,
though only 235 bales were received by it and there was a shortfall of
76 bales in the consignment. It was submitted that the defendant had
accounted for the purchase during 1998-99 and had made full
payment to the foreign supplier, that is, M/s. Unisilk Limited
including the value of 76 bales short received during the year 1998-99
itself, and subsequently during 1999-2000, the defendant had filed an
insurance claim of Rs.20.38 lakhs, which was rejected by the
insurance company. It was also submitted that the payment terms
were D.P. at sight and hence payment had to be made to the foreign
supplier even before clearance of shipment as per the terms of the
contract and accordingly the defendant had made the payment of 311
bales to the foreign supplier. It was specifically stated that as per the
agreement between the parties, it was clearly mentioned that the
defendant had no liability towards any claim in respect of quality and
quantity of the consignment imported. The defendant had filed a suit
for recovery against M/s Unisilk Limited only at the request of the
plaintiff towards the loss suffered on account of costs of 76 bales.
The present suit was, therefore, liable to be rejected.
46. The defendant in the written statement filed by it also
submitted that the suit was barred by limitation as the same had been
filed with delay of almost nine years and, thus, was liable to be
rejected.
47. On 17.2.2009, on the pleadings of the parties, the following
issues were framed for consideration:-
"1. Whether the plaintiff is entitled to recover any
monies/damages for short supply of goods from
the defendant and if so in what amount? OPP
2. If the above issue is decided in favour of the
plaintiff whether the plaintiff is entitled to any
interest, if so at what rate and for what period?
OPP
3. Whether the claim of the plaintiff in suit is
barred by time? OPD
4. Whether the proceedings in the present suit are
to be stayed under Section 10 of the CPC? OPD
5. Whether the suit is bad for non-rejoinder of the
M/s Unisilk Ltd., M/s China Merchants Insurance
Company Ltd. and M/s Ceemis, Claim Settling
Agent and M/s TATA Tea Ltd. and if so to what
effect? OPD
6. Relief."
48. On 28.09.2010, the court recorded the submission of the parties
that since the controversy revolved around interpretation of
documents only, there was no need for oral evidence and the suit was
accordingly listed for final disposal.
49. At the time of hearing, Mr. Vibhor Garg, the learned counsel
for the plaintiff submitted that in view of the order passed by this
Court on 17.02.2009, he does not press for a finding being rendered
by this Court on Issue No.4 relating to Section 10 of the Code of Civil
Procedure and he confines his arguments to the remaining issues.
50. Mr. Garg, the learned counsel for the plaintiff submitted that
there were two separate and distinct transactions/contracts; first,
between the foreign exporters and the canalizing agency/defendant
and the second between the canalizing agency/defendant and the
domestic consumer/plaintiff. He emphasized that the
defendant/canalizing agency had entered into back to back
agreements with the foreign supplier Messrs Unisilk Limited and the
plaintiff. Both the said transactions were separate and distinct with
no inter se nexus; there was no casual connection between the import
of mulberry silk by the defendant and the purchase of imported goods
in India by the plaintiff. The defendant had purchased goods in its
own name as a wholesale importer. The property in the goods were
transferred to the defendant and in turn the defendant sold the goods
to the plaintiff. The defendant was not acting as agent of the plaintiff
as claimed. There existed no privity of contract between the plaintiff
and the foreign exporter, in that, the transaction under which the
goods were placed on board the ship did not create any real rights and
obligations between the foreign sellers and the plaintiff.
51. Learned counsel for the plaintiff contended that the aforesaid
facts were evident from the defendant's own admissions set out in the
plaint in CS(OS) No. 2340/2001, which must be construed as
admissions within the meaning of Section 17 of the Indian Evidence
Act, 1872. He placed reliance, inter alia, on the following
admissions made by the defendant:-
(i) Specific and direct admission of liability by the
defendant - HHEC vide confirmation letter dated
27.11.2002 admitting credit balance in favour of the
plaintiff.
(ii) Statement made in paragraph 5 of the written statement
filed by the defendant - HHEC in the present suit
admitting credit balance of Rs.18.45 lakhs (Principal
amount) under Schedule of current liabilities in favour of
the plaintiff.
(iii) Admissions made by the defendant - HHEC in CS(OS)
No. 2340/2001 in so far as the present suit is concerned
and in particular those made in paragraphs 2, 11, 12, 14,
15 and 25 of the plaint in the said suit.
52. In order to rebut the aforesaid contentions of the learned
counsel for the plaintiff, the defendant-HHEC contended that the
defendant was only acting as a canalizing agency and the foreign
supplier-M/s Unisilk was chosen by the plaintiff itself. The subject
matter of the contract was insured with M/s China Merchants, a Hong
Kong based Company. CEEMIS Claim Settling Agent of England
was survey agent of M/s. China Merchants. The payment terms were
DP at sight and hence payment had to be made to the foreign supplier
even before clearance of shipment as per the terms of contract and
accordingly the defendant made the total payment of 311 bales to the
foreign supplier; only 235 bales were received and there was a
shortfall of 76 bales in the consignment. The defendant had
accounted for the purchase during 1998-99 and had made full
payment to the foreign supplier-M/s. Unisilk Limited including the
value of 76 bales short received during the year 1998-99 itself;
subsequently during 1999-2000, the defendant had filed an insurance
claim of Rs.20.38 lakhs, which was rejected by the insurance
company. Thereafter the plaintiff had requested the defendant to
institute a recovery suit and provided all the papers relating to the
communication with the foreign exporter, insurance company etc. as
evidenced from letter dated 5.10.99 of the plaintiff to the defendant,
which categorically states, "We undertake to reimburse to HHEC of
India Limited expenses it may have to incur." The defendant
accordingly filed a suit for recovery bearing CS(OS) No. 2340/2001
against M/s Unisilk Limited for the loss caused to the plaintiff on
account of short delivery of 76 bales of mulberry raw silk. The
plaintiff had been arrayed as defendant No.8 in the said suit. Thus the
present suit was an abuse of the process of law.
53. Learned counsel on behalf of the defendant, also contended that
the instant suit filed by the plaintiff was liable to be rejected in terms
of clause 3 of the Annexure A containing the terms and conditions of
the agreement dated 27.10.98 entered into between the plaintiff and
the defendant. For the sake of facility and ready reference, the said
clause is reproduced as under:-
"3. The particulars of quality as indicated on the
import invoice, buyer shall furnish certificate at
the time of taking delivery that silk imported is to
the satisfaction of the buyers with regard to quality
and quantity. It is hereby expressly agreed and
understood that HHEC will neither be liable nor
entertain any claim in respect of the quality and
quantity of the consignment imported."
54. Learned counsel contended that it is crystal clear from the
aforesaid clause that the defendant-HHEC can in no eventuality be
held liable for any claim in respect of quality and quantity of the
consignment imported. He emphasized that HHEC was merely acting
as an agent between the plaintiff and the foreign supplier. He also
relied upon clause 11 and clause 13 of the Annexure A of the
agreement dated 27.10.1998, which read as under:-
"11. The buyer agrees and undertakes to keep the HHEC
indemnified and harmless against all claims, costs,
expenses and risks".
"13. The buyer agrees and assures that the HHEC will
not be liable or responsible in any manner for any act of
fraud, deceipt, misrepresentation, etc. interalia as
regards the quality of the silk as also in the event the
consignment is discovered to be other than that for which
the order was placed and the buyer undertakes to keep
HHEC indemnified and harmless against all claims,
offences, penalties, levies etc."
55. It was further contended that the present suit had been filed by
the plaintiff only on the basis that the defendant-HHEC had shown
the amount of Rs.18,44,950/- as credit balance standing in the books
of accounts of the defendant to be paid to the plaintiff. It was
submitted that the accounting entries reflected in the account of the
defendant during 1999-2000 were "insurance claim receivable",
under Schedule Current Assets amounting to Rs.20.38 lakhs and
credit of Rs.18.45 lakhs under Schedule Current Liabilities. It was
clarified that the said accounting entries had been made for control
purposes as explained in the written statement filed by the defendant
and to establish that the defendant had incurred loss on account of
short receipt of 76 bales. At the time of submission in the civil suit
against the foreign supplier, that is, M/s Unisilk Limited, the plaintiff
in fact owed a sum of Rs.1.33 lakhs to the defendant apart from the
cost of filing the civil suit against the foreign supplier on behalf of the
plaintiff.
56. Apart from the above, the learned counsel for the defendant
contended that the suit of the plaintiff was barred by limitation. The
agreement was entered into between the parties in 1998 and the
consignment had been found short in 1999. Thus, the present suit
filed in 2008 by the plaintiff, nine years after the accrual of the cause
of action was clearly barred by limitation and liable to be rejected on
this ground alone. It is settled law that mere writing of
letters/reminders would be of no avail to the plaintiff in enhancing the
period of limitation.
57. It was further contended that the suit was bad for misjoinder of
parties, in that, plaintiff had not arrayed as parties M/s Unisilk
Limited (the foreign supplier), the China Merchants (the insurance
company), CEEMIS-Claim Settling Agency and M/s TATA Tea
Limited etc. as necessary parties for the adjudication of the present
case. Whether the foreign supplier was responsible for the shortage
of 76 bales or pilferage had occurred during shipment or at the
Container Corporation of India where the goods were kept after the
shipment reached India, it was contended, could not be determined in
the absence of the aforesaid parties.
58. Finally, learned counsel for the defendant contended that the
plaintiff by filing the present suit had abused the process of law,
inasmuch as the defendant had, at the request of the plaintiff, filed the
suit for recovery against the foreign supplier on account of loss
caused by shortage of 76 bales to the plaintiff. It had been the
categorical stand of the defendant that after the defendant succeeds in
the said suit and the amount is recovered from the foreign supplier,
the claims of the plaintiff will be satisfied after deducting the legal
expenses. It is for this reason that the plaintiff had all along
supported the defendant in CS(OS) No. 2340/2001 and had not even
filed written statement in that suit and/or cross-examined the witness
of the defendant in that suit. The present suit was, therefore, liable to
be dismissed.
59. Having carefully considered the respective contentions of the
parties, the Court is of the opinion that in the present case, the foreign
supplier, that is, M/s Unisilk Limited was chosen by the plaintiff
itself. All the terms and conditions of the agreement entered into with
the foreign supplier by the defendant were finalized by the plaintiff.
The defendant-HHEC was only the canalizing agency whose services
had been sought by the plaintiff on account of the Government of
India Notification No. 47 (Re-98)/97-02 issued on 8.10.98 to allow
the import of mulberry silk without import licence for which the
defendant had been permitted by the Government as a designated
agency. The plaintiff was dealing directly with the foreign supplier
and the defendant-HHEC was only acting as an agency as the plaintiff
could not import mulberry silk directly. At the very outset it had been
clarified by the defendant that it would not be responsible for any loss
caused to the plaintiff on account of the quality or quantity of the
import consignment. This is amply borne out by Clause 3 of the
agreement between the parties dated 27.10.98, which requires the
buyer to furnish a certificate at the time of taking delivery that the silk
imported is to the satisfaction of the buyer with regard to the quality
and quantity; and further provides that the HHEC will neither be
liable nor entertain any claim in respect of the quality and quantity of
the consignment imported. Clause 11 of the agreement further
provides that the buyer agrees and undertakes to keep the HHEC
indemnified and harmless against all claims, costs, expenses and
risks. Clause 13 clinches the issue by providing that the buyer agrees
and assures that the HHEC will not be liable or responsible in any
manner for any act of fraud, deceipt, misrepresentation, etc. inter alia
as regards the quality of the silk as also in the event the consignment
is discovered to be other than that for which the order was placed and
the buyer undertakes to keep HHEC indemnified and harmless against
all claims, offences, penalties, levies etc.
60. It is also not in dispute that the earlier suit CS(OS)
No.2340/2001 was filed by the defendant-HHEC at the behest of the
plaintiff. This is also borne out by the letter dated October 5, 1999 of
the plaintiff to the defendant, which categorically states: "We
undertake to reimburse to HHEC of India Limited expenses it may
have to incur." The Court is, therefore, of the view that the present
suit belatedly filed by the defendant against the plaintiff apart from
being an afterthought is an abuse of the process of law, more so, as
the plaintiff had been arrayed as defendant No.8 in the earlier suit,
and as is evident from the record of the said suit, the plaintiff had
been supporting the defendant, vis-à-vis its claim against the foreign
supplier and the insurance company.
61. As regards the issue of limitation raised by the defendant and
the admissions and acknowledgments pressed into service by the
plaintiff, including the balance confirmation dated 27.11.2002 in the
books of accounts of the defendant, in view of the specific contract
agreement between the parties that the defendant would not be
responsible for either the quality or quantity of the consignment in
any eventuality, it is not possible to hold that the plaintiff is entitled to
recover the suit amount, which constitutes short-fall in the
consignment from the defendant. The Court is, however, of the
opinion that the defendant having acted as the canalizing agency for
the plaintiff to enable the plaintiff to import mulberry silk into India,
on the plaintiff's recovering the amount due from the foreign supplier
on account of the shortfall of the delivery in the consignment, the
plaintiff shall be entitled to receive the same from the defendant. To
be noted at this juncture that the defendant has never disputed the fact
that the amount when recovered from the foreign supplier-M/s
Unisilk Limited and/or the insurance company, the claims of the
plaintiff will be satisfied by the defendant.
62. In view of the fact that a decree has been passed in favour of
the defendant-HHEC and against the foreign supplier in CS(OS)
No.2340/2001, the present suit is disposed of with a direction to the
defendant-HHEC to pay the decretal amount recovered as a result of
the decree passed in CS(OS) No. 2340/2001 to the plaintiff in the
present suit within 30 days of the receipt thereof. In case the said
amount is not paid within a period of 30 days of the receipt thereof,
the defendant shall be liable to pay the same to the plaintiff with
interest at the rate of 18% per annum till the date of realization.
63. CS(OS) No.2340/2001 and the present suit being CS(OS)
No.480/2008 stand disposed of accordingly.
REVA KHETRAPAL
JUDGE
July 09, 2012
km/sk
