[Cites 7, Cited by 0]
Karnataka High Court
Prakash Parcel Services Limited vs Beml Limited on 25 March, 2026
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COMAP No. 211 of 2025
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 25TH DAY OF MARCH, 2026
PRESENT
THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE C.M. POONACHA
COMMERCIAL APPEAL NO. 211 OF 2025
BETWEEN:
PRAKASH PARCEL SERVICES LIMITED
HAVING ITS REGD OFFICE AT NO.18/3,
1ST MAIN, 2ND FLOOR,
MISSION ROAD,
SAMPANGIRAMA NAGAR,
BANGALORE-560027
REPRESENTED BY ITS
EXECUTIVE DIRECTOR
MR.PRAKASH PANDEY
...APPELLANT
(BY SRI. A S GUPTA, ADVOCATE)
Digitally
signed by
NIRMALA AND:
DEVI
BEML LIMITED
Location:
HIGH (REGD CORPORATE BODY)
COURT OF CORPORATE MATERIALS
KARNATAKA BEML SOUDHA, 23/1, 4TH MAIN,
S.R.NAGAR, BANGALORE-560027
REPRESENTED BY ITS
MANAGING DIRECTOR
...RESPONDENT
(BY SRI. VIKRAM HUILGOL, SENIOR ADVOCATE A/W
SRI. ISMAIL MUNEEB MUSBA, ADVOCATE)
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COMAP No. 211 of 2025
THIS COMAP IS FILED UNDER SECTION 13(1-A) OF
COMMERCIAL COURTS ACT 2015, PRAYING TO SET ASIDE
THE JUDGMENT AND DECREE PASSED IN COM. OS
NO.25714/2017 ON DATED 30.01.2025 IN COMMERCIAL
COURT BY LXXXII ADDITIONAL CITY CIVIL AND SESSIONS
JUDGE, BENGALURU (CCH-83) MARKED AS ANNEXURE - C
AND ALLOW THE APPEAL.
THIS APPEAL HAVING BEEN HEARD AND RESERVED
FOR JUDGMENT, COMING ON FOR PRONOUNCEMENT THIS
DAY, JUDGMENT WAS PRONOUNCED AS UNDER:
CORAM: HON'BLE MR. VIBHU BAKHRU ,CHIEF JUSTICE
and
HON'BLE MR. JUSTICE C.M. POONACHA
CAV JUDGMENT
(PER: HON'BLE MR. JUSTICE C.M. POONACHA)
1. The present appeal is filed by the plaintiff under Section
13(1A) of the Commercial Courts and Commercial Divisions Act,
2015 [CC Act] calling in question the judgment and decree dated
30.01.2025 passed in O.S. No.25714/2017 [impugned judgment]
by the LXXXII Additional City Civil And Sessions Judge , Bengaluru
(CCH-83) [Commercial Court] whereunder the suit for recovery of
money filed by the plaintiff was dismissed.
2. For the sake of convenience, the parties herein are referred as
per their rank before the Commercial Court.
3. The relevant facts are that the defendant had issued a tender
for providing transportation services for spares and steel plates
from Chennai Port to the defendant's works at Bengaluru, Mysuru
and KGF for period of three years from 01.06.2008 to 31.05.2011.
The plaintiff was the successful tenderer consequent to which the
parties had entered into an Agreement dated 25.06.2008 [said
agreement]. The plaintiff claims that the agreement was extended
up to 31.07.2011. The defendant alleged that the plaintiff had
breached several terms of the contract and did not render the
services as required under the agreement.
4. Due to the disputes that arose between the parties with
respect to the said agreement, the plaintiff filed an application
under Section 11 of the Arbitration and Conciliation Act, 1996 [A&C
Act] before this Court in CMP No.132/2012. A learned Single
Judge by order dated 14.12.2012, allowed the said application and
appointed an arbitrator [arbitral tribunal]. The plaintiff filed a claim
petition claiming a sum of `60,83,990/- together with interest @
21% per annum. However, the arbitral tribunal vide order dated
07.11.2016, terminated the arbitration proceedings. Subsequently,
the plaintiff filed the suit [O.S.No.25714/2017] on 24.06.2017
whereunder, the plaintiff sought for recovery of a sum of
`1,18,70,115/- from the defendant together with interest @ 21%
per annum from date of suit till date of payment.
5. It was contended by the plaintiff in the plaint that the
arbitration proceedings commenced on 14.12.2012 and continued
up to 07.11.2016 i.e., for a period of 1432 days. That said period of
1432 days is required to be excluded in computing the period of
limitation while filing the suit. Hence, it was contended that the suit
filed is within time.
6. With regard to the claims made by the plaintiff, it was
contended that the defendant was liable to a sum of `52,17,110/-
being the freight charges along with bank guarantee amount of
`10,00,000/- and illegally forfeited Earnest Money Deposit [EMD] of
`2,10,000/- aggregating a sum of `64,27,110/-; which included the
admitted liability of `29,61,000/-. Further, it was stated that since
the defendant made a claim of `3,63,120/- being the excess freight
charges paid, the said amount was deducted and the plaintiff
claimed `60,63,990/- in the arbitration proceedings along with
`20,000/- towards the cost of the legal notice issued in the
arbitration proceedings. The plaintiff also claimed interest at the
rate of 21% p.a. The said interest was calculated for the period
14.12.2012 to 24.06.2017, which amounted to `57,86,125/-.
Hence, the plaintiff claimed a sum of `1,18,70,115/- in the suit
together with interest at 21% p.a., from the date of suit till date of
payment.
7. The defendant entered appearance in the suit and filed its
written statement contesting the said suit. Firstly it was contended
that the suit was barred by limitation. In this regard it was stated
that as per Article 18 of the Limitation Act, 1963 [Act of 1963] the
period of limitation prescribed was 3 years from the date of work
done. That the agreement was from 01.06.2008 for a period of 3
years. Hence, it was contended that assuming without admitting
that cause of action arose on 30.06.2012 i.e., the last date of
payment, the suit was barred by time.
8. The defendant admitted the execution of the agreement dated
25.06.2008 and that it was valid for a period of 3 years from
01.06.2008. However, it was contended that during the pendency
of the agreement, the plaintiff breached several terms of the
agreement including, inter alia, not placing trailers for lifting steel
plates at the designated time from Chennai Port. That the plaintiff,
despite various communications from the defendant, did not place
trailers on many occasions for lifting steel plates at the designated
places as was required to be done. That the defendant had
deployed gangmen along with cranes and had made necessary
arrangements required for loading the steel plates on to the trailers
through an agency M/s Sanco, Chennai. That since the plaintiff
failed in its obligations, the defendant had to also hire another
transporter M/s. All India Carriers (P) Ltd., for the purpose of lifting
and transporting the steel plates from Chennai Port. Hence, it was
contended that the difference freight charges of `3,38,221/- which
was incurred by the defendant was recovered from the plaintiff from
pending bills of the defendant in accordance with terms and
conditions of the agreement. It was further contended that the
defendant was imposed with demurrage charges by Chennai Port
Authorities, which was in a sum of `26,23,000/-. Hence, the
defendant had recovered a sum of `29,61,000/- from the plaintiff
towards the actual damages suffered. The said amount was
recovered in the following manner:
(i) `10 lakh by encashment of bank guarantee;
(ii) `5 lakh from EMD;
(iii) `14,61,000/- from pending bills of KGF;
9. Accordingly, the defendant sought for dismissal of the suit.
10. Consequent to the pleadings of the parties, the Commercial
Court framed the following issues:
"1. Whether the plaintiff proves that the defendant is
liable to pay sum of Rs.1,18,70,115/-?
2. Whether the plaintiff proves that the defendant is
liable to pay interest at the rate of 21% per annum from
the date of the suit till realization?
3. Whether the plaintiff is entitled relief as prayed for?
4. What Decree or Order? "
11. The Director of the plaintiff was examined as PW.1. Exs.P1 to
P4 were marked on behalf of the plaintiff. The representative of the
defendant was examined as DW.1. Exs.D1 to D30 were marked
on behalf of the defendant. The Commercial Court by its judgment
and decree dated 30.01.2025 dismissed the suit. Being aggrieved,
the present appeal is filed.
12. The Commercial Court held that the plaint lacked the essential
material particulars which gave rise to the cause of action to the
plaintiff. It was further noticed that although the plaintiff has
produced the agreement/contract as Ex.P1, there is no averment in
the plaint regarding Ex.P1. That PW1 in the affidavit by way of
examination of chief has deposed regarding the tender and the
agreement executed between the parties; however, since there
was no plea regarding the agreement dated 25.06.2008, the
Commercial Court dismissed the suit.
13. In the plaint, the plaintiff has averred in detail primarily with
regard to the aspect of limitation and the details/particulars
regarding the arbitration proceedings commenced by it and the
termination thereof. The relevant dates from which the cause of
action commenced and period of pendency of the arbitration
proceedings, which were to be excluded has been set out
elaborately. The Commercial Court, on the aspect of limitation, has
held in favour of the plaintiff which has not been challenged by the
defendant. Hence, the aspect with regard to the limitation is not
required to be considered in the present appeal.
14. With regard to the details/particulars as to the suit claimed
amount, the relevant averments are contained in paragraph Nos.6
and 7 of the plaint, which are as under:
"6. The claim of Rs.60,83,990/- (Rupees Sixty Lakh
Eighty Three Thousand Nine Hundred Ninety Only) is
capital amount which carries interest @21% per annum
- The interest will be calculated and added in the capital
amount of Rs.60,83,990/- (Rupees Sixty Lakh Eighty
Three Thousand Nine Hundred Ninety Only). The suit
claimed includes to transport materials of the KGF and
MYSORE the materials are detail in agreement bearing
no.CPC/ROAD TRANSPORT/2008-09 for the period
covering which was subsequently extended upto 31-07-
2011. Transportation charges.
7. It is submitted that the defendant is liable to pay a
sum of Rs.52,17,110(Rupees Fifty Two Lakhs
Seventeen Thousand One Hundred and Ten Only)
being the freight charges along with Bank Guarantee
amount of 10,00,000/- (Rupees Ten Lakh Only) and
illegally forfeited EMD amount of Rs.2,10,000/- (Rupees
Two Lakh Ten Thousand Only) aggregating to a sum of
Rs.64,27,110/- (Rupees Sixty Four Lakhs Twenty Seven
Thousand One Hundred and Ten Only), which is
inclusive of the admitted liability of Rs.29,61,000/-
(Rupees Twenty Nine Lakh Sixty One Thousand Only)
and on these sum, the defendant made a claim of
Rs.3,63,120/- (Rupee Three Lakh Sixty Three Thousand
One Hundred Twenty Only) the same was deducted
from the total claim after deducting the excess freight
charges Rs.3,63,120/- the plaintiff claims the sum of
Rs.60,63,990/-(Rupees Sixty Lakh Sixty Three
Thousand Nine hundred Ninty along with sum of
Rs.20,000/- Rupees Twenty Thousand only) being the
cost towards the legal notice issued in the Arbitration
proceedings. The interest is calculated on the capital
amount of Rs.60,63,990/-(Rupees Sixty Lakh Sixty
Three Thousand Nine hundred Ninty only) at the rate
21% per annum, is calculated with effect from 14-12-
2012 to 24-06-2017-works out to Rs.57,86,125/-
(Rupees Fifty Seven Lakh Eighty Six Thousand One
Hundred Twenty Five Only).
The interest calculated is subject to E & OE. "
15. With regard to the claim made by the plaintiff on merits, the
defendant in the written statement has set out various instances of
the breach committed by the plaintiff. Subsequently, the defendant
has stated that the difference freight changes that it had incurred
as a result of employing a separate transporter to transport the
items/goods which the plaintiff was required to transport under the
subject agreement was a sum of `3,38,221/-, which was recovered
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from the pending bills. Further, it has stated that the defendant
was imposed with demurrage charges of `26,23,000/- by the
Chennai Port Authorities. Hence, the defendant stated that it had
recovered a sum of `29,61,000/-. The said amounts were
recovered by encashing the bank guarantee of `10 lakhs; by
retaining EMD of `5 lakhs; and `14,61,000/- from the pending bills.
16. It was further specifically contended by the defendant that the
plaintiff had claimed a sum of `52,17,110/- from the defendant in
the arbitration proceedings. The details of the said arbitration
proceedings have been set out in the written statement. It is further
stated that the remedy available to the plaintiff was to seek for
substitution of the arbitrator.
17. It is relevant to notice that the plaintiff examined its Executive
Director (Sri Prakash Pandey) as PW.1. Apart from agreement
dated 25.06.2008 (Ex.P1) and the order passed under Section 16
of the A&C Act (Ex.P2), the plaintiff has produced its accounts
statement (Ex.P3) and a letter dated 26.07.2014 (Ex.P4) written by
it to the defendant claiming a sum of `60,83,990/- from the
defendant.
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18. The defendant examined its Senior Manager as DW.1 and
marked Exs.D1 to D30. The invoices raised by the Chennai Port
Authorities on the defendant (88 numbers) have been collectively
marked as Ex.D28. The defendant has produced a letter dated
14.02.2011 (Ex.D27) whereunder, it has communicated to the
plaintiff that since the consignments have not been lifted by the
plaintiff as requested by the defendant, it has been intimated that
the defendant is incurring huge demurrage charges at the port and
that the Port Authorities had intimated the defendant that the
material will be auctioned if not cleared immediately. Hence, the
defendant has indicated to the plaintiff that the demurrage charges
will be on the account of the plaintiff. Vide letter dated 4.10.2011
(Ex.D29) the defendant has intimated the plaintiff that the amount
to be recovered from the plaintiff is a sum of `29,61,000/- and the
same has been recovered from pending bills (`14.61 lakhs) from
EMD (`5 lakhs) and from bank guarantee (`10 lakhs).
19. The claim made by the plaintiff was a sum of `60,83,990/- as
principal amount and a sum of `57,86,125/- being the interest at
the rate of 21% p.a., up to the date of the suit.
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20. With regard to the principal amount of `60,83,990/-, the
plaintiff has not averred the details/particulars as to the basis of the
said claim. Further, apart from the statement of accounts (Ex.P3),
the plaintiff has not produced any other document to
demonstrate/prove the basis of its claim. No documents like
invoices, etc., have been produced in support of the amounts
claimed vide the statement of accounts (Ex.P3).
21. The defendant has stated that it has recovered a sum of
`29,61,000/- from the pending bills, EMD and bank guarantee.
Hence, the defendant had admitted that the said sum(`29,61,000/-)
was due and payable to the plaintiff. In justification of the expenses
incurred, the defendant has produced the bills/invoices raised by
the Chennai Port Authorities as also the invoices raised by the
clearing agent (M/s Sanco, Chennai) on the defendant, which bills
have been collectively marked as Ex.D28.
22. A perusal of Ex.D28 indicates that 88 bills have been
produced. 73 bills have been issued by the Chennai Port
Trust/Madras Port Trust, which cumulatively amount to
`26,92,329/-. 15 number of bills are of the agency hired for
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lifting/loading at the Port, which are for a cumulative sum of
`10,25,519/-.
23. The agreement (Ex.P1) specifically stipulates that, in the
event, the vehicles are not deployed within the stipulated time, the
defendant will have a right to transport the goods through another
carrier and is entitled to recover the excess freight charges
incurred. The relevant clause in Ex.P1 in this regard is as under:
"In the event the carrier fails to deploy vehicles within
stipulated time, BEML or BEML's supplier will have right
to transport goods. through alternate carries at the sole
risk and cost of contracted carrier. The excess freight
charge Incurred (If any). In making alternate
arrangement shall be debited to carrier's account or will
be recovered from their pending / subsequent bills."
24. Further, the agreement also stipulates the penalty for delayed
delivery, which is as under:
"PENALTY FOR DELAYED DELIVERY:
> The maximum period of delivery of all material
entrusted to the carrier for carriage shall be as
mentioned in "Transit Time" above. If the carrier fails to
deliver the goods within the stipulated time, a penalty of
1% per day of the total freight charges, subject to a
maximum of 15% will be levied.
> Penalty for late delivery beyond the stipulated
period for LCVS will be 10% of the freight charges per
day for 2 days and beyond this, freight charges will be
forfeited.
Even If the goods are delayed-en-route for any valid
reasons beyond the carriers control and the goods are
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not delivered at the destination within 30 days from the
date of dispatch, the carriers bill will not be paid."
25. PW1 in his affidavit by way of examination-in-chief has stated
that the defendant company did not pay freight charges to the
plaintiff in a sum of `60,83,990/-. Further, it has averred that the
damages claimed by the defendant from the plaintiff, which has
been recovered from the amounts due and payable to the plaintiff
are of a total sum of `55,18,256/-. The averment regarding the
same is made at para 7 of the affidavit by way of examination-in-
chief, which is as under:
"7. The defendant company for the reasons best known
to them defrauded the plaintiff company by concocting
fast claims of damages as follows:
i) Rs. 10,00,000/- by encasing the bank guarantee:
ii) Rs. 5,00,000/- from Earnest Money Deposit:
iii) Rs.14,61,000/- from the pending bills:
iv) Rs.22,19,035/- and further claimed adjustment on
damages.
v) Rs.3,38,221/- towards a breach of agreement by
way of additional freight charges.
= Rs.55,18,256/- the total damages claimed and
adjusted by the Defendant on the strength of the
agreement dt 25.06.2008."
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26. However, PW1 has not enumerated the details/particulars/
basis of the claim of `60,83,990/- or the sum of `55,18,256/- as
stated in the affidavit by way of examination-in-chief. In the cross-
examination, PW1 admits that as per the agreement, the plaintiff
has to raise separate bill for each transaction. However, no such
bills have been raised. PW1 admits the suggestion made by the
defendant that the plaintiff is liable to make good the
damages/losses caused to the defendant and that the agreement
also contemplates penalty for delayed delivery. PW1 admits at
paragraph 7 of the cross-examination that it had made a claim of
`60,83,990/- along with interest at 21% p.a., before the arbitral
tribunal. It is further admitted that the plaintiff filed a memo before
the arbitral tribunal restricting the claim for a sum of `44,19,490/-
after deducting `16,64,500/- from the claim amount of `60,83,990/-
since the said sum arose from a different contract.
27. PW1 has stated that on the basis of Ex.P4, a sum of
`52,17,110/- was claimed. Ex.P4 is a letter dated 26.07.2014
written by the plaintiff to the defendant seeking for the following
amounts:
"1. An amount of Rs. 44,19,490/- principal amount of
freight charges + interest approximately Rs.12.10 lacs is
pending for finalization through Arbitration process.
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2. An amount of Rs. 16,64,500/- is towards detention
charges + interest of Rs. 7.50 lacs which is to be treated
for separate Contract.
3. We have given a Bank Guarantee of 10 lacs for which
we have lost Rs. 4.95 lacs towards interest as the BG
was revoked as per your letter reference No.
CM/PPS/2011-12 dated 04.10.2011.
4. An amount of Rs. 5 lacs EMD against which we have
lost interest of 2.45 lacs as it was revoked as per your
letter reference No. CM/PPS/2011-12 dated
04.10.2011."
28. However, no documents have been produced in the present
suit with regard to the basis of the said claim. To a question as to
whether the suit claim amount is shown in the income tax returns of
the plaintiff, PW.1 has stated that he needs to verify the same.
29. DW.1 has filed the affidavit by way of examination-in-chief
wherein, the averments made in the written statement have been
reiterated. Various clauses in the agreement with regard to the
forfeiture of security deposit, termination of contract, etc., have
been extracted. The communications issued by the defendant to
the plaintiff, calling upon it to lift the material from Chennai Port and
transport the same, have been produced as Exs.D5 to D23. It is
pertinent to notice that in the said communications, the defendant
had clearly stated that the plaintiff had breached the terms of the
contract several times and the plaintiff was put to notice to set right
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the breach. The plaintiff was also informed that due to delay in
lifting the material from Chennai Port, production in the defendant
company was held up. The plaintiff was also notified that if it
continued such delay, the defendant would have no other option
but to hire another transporter on account of the plaintiff.
30. The bills issued by the Chennai Port Trust/Madras Port Trust
and the clearing agent were collectively marked as Ex.D28. It is
noticed that the same were marked subject to objection. However,
the nature of objection is not stated. In the bills/particulars of
charges issued by the Chennai Port Trust/Madras Port Trust, there
is a seal of the Chennai Port Trust, which indicates that the amount
is paid by debiting the current account. The date of the said debit
is also mentioned. The dates of the bills marked as Ex.D28 are
during the period of agreement. DW.1 has not been cross-
examined regarding any of the documents, which have been
collectively marked as Ex.D28.
31. DW.1, in the cross-examination has admitted that it had not
floated any tender for transport services during the period of
subject agreement. It is also admitted that, in case of emergency,
the defendant has a right to engage other transport vehicles. It is
also admitted that the plaintiff is providing services at other places
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to the defendant. There is no other statement of DW.1 in the
cross-examination that impeaches his testimony.
32. It is clear from the aforementioned that the defendant has
adequately proved that it had incurred expenses towards freight
charges and demurrage and hence, was justified in deducting the
sum of `29,61,000/-. On the other hand, as already noticed above,
the plaintiff has not either specifically averred as to the basis of its
claim made in the suit nor produced any material on record to
justify the suit claim amount.
33. The Commercial Court was justified in coming to the
conclusion that the plaintiff has not proved the amount due and
payable by it. Further, the defendant having averred it was due
and payable in a sum of `29,61,000/- by the plaintiff, it has
produced adequate material to demonstrate that the amounts were
due and payable by the plaintiff. Hence, the defendant was justified
in deducting the said amount from the amounts due and payable to
the plaintiff.
34. In view of the aforementioned, the plaintiff has failed to
demonstrate the judgment and decree passed by the Commercial
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Court is in any manner erroneous and liable to be interfered with by
this Court in the present appeal.
35. Accordingly, the above appeal is dismissed as being devoid of
merit with costs.
36. All pending applications are also disposed of.
Sd/-
(VIBHU BAKHRU)
CHIEF JUSTICE
Sd/-
(C.M. POONACHA)
JUDGE
nd/vmb
