Madras High Court
Appellant / Respondent / vs Patvolk on 23 June, 2021
1 S.A.(MD)No.733 OF 2012
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 23.06.2021
CORAM
THE HONOURABLE MR.JUSTICE G.R.SWAMINATHAN
S.A.(MD)No.733 of 2012
Narasu's Saarathy Enterprises Private Limited,
through its Managing Director,
M.V.Balasubramaniam,
S/o.Muthu Venkata Rajasekaran,
16-A, Court Road, Post Box No.725,
Johnsonpet, Salem – 636 007.
(Amended vide Order dated 27.04.2021 made in
C.M.P.(MD)No.9802 of 2018)
... Appellant / Respondent /
Plaintiff
Vs.
1. Patvolk,
Division of Forbes Gokak Ltd.,
88, World Trade Avenue,
Harbour Estate,
Tuticorin – 628 00.
2. Lloyd Treistine D,
Nagiazione S.P.A.,
Passeggio S.Andrea – 4, 34123 Trieste,
Italy.
3. Lloyd Treistine D, Nagiazione S.P.A.,
22, Martin Road, 0701, Kingsun Building,
Singapore.
... Respondents / Appellants /
Defendants
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1/16
2 S.A.(MD)No.733 OF 2012
Prayer: Second appeal filed under Section 100 of C.P.C.,
against the Judgment and Decree passed in A.S.No.67 of 2005
on the file of the Principal District Court, Thoothukudi, dated
27.07.2011 partly allowed the Judgment and Decree in O.S.No.
215 of 2000 on the file of the Sub Court Thoothukudi, dated
02.08.2004.
For Appellant : Mr.P.S.Sundaram
For Respondents : Mr.Vipin P.Varghees,
for M/s.V.J.Mathew & Co.
***
JUDGMENT
This second appeal arises out of a suit for damages.
2. The plaintiff in O.S.No.215 of 2000 on the file of the
Sub Court, Thoothukudi, is the appellant herein. The plaintiff
placed an import order with an Australian company for supply
of 551.080 metric tones of wheat. The goods were despatched
from Sydney through a vessel under bill of lading
No.SY913266 dated 15.10.1999. The goods were loaded in 25
full container loads. Tuticorin port was fixed as the port of
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destination. The plaintiff had engaged an agency for clearing
the goods and despatching the same to their factory at Salem.
The shipper loaded the entire consignment on 15.10.1999.
Defendants 2 and 3 were the liners who had undertaken to
transport the goods from Sydney to Thoothukudi. The first
defendant was their agent. On account of the negligence on
the part of the defendants, the goods instead of landing at
Thoothukudi port, landed at Mumbai port. A circuitous route
was taken. In normal circumstances, delivery which should
have been taken 30 to 40 days was delayed by more than
three months. The goods reached Colombo and then went to
Mumbai. The shipment reached Tuticorin by train. The
plaintiff claimed that he suffered loss to the tune of
Rs.4,17,805/-. The losses were quantified under seven distinct
heads. Adding the interest component, the plaintiff filed the
aforesaid suit for directing the defendants to pay a sum of
Rs.4,56,335/- with interest. Defendants 2 and 3 filed written
statement controverting the plaint averments. Based on the
divergent pleadings, the trial Court framed the necessary
issues. On the side of the plaintiff, as many as five witnesses
were examined. Ex.A.1 to Ex.A.48 were marked. On the side of
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the defendants, D.W.1 was examined. Bill of lading dated
15.10.1999 was marked as Ex.B.1. After considering the
evidence on record, the trial Court by judgment and decree
dated 02.08.2004 partly decreed the suit by directing the
defendants to pay the plaintiff a sum of Rs.4,11,255.50/- with
interest @ 6% p.a. from the date of plaint till the date of
payment.
3. Aggrieved by the same, the defendants filed A.S.No.67
of 2005 before the Principal District Judge, Thoothukudi. By
the impugned judgment and decree dated 27.07.2011, the
judgment and decree passed by the trial Court was modified
and the appeal was partly allowed and the liability of the
defendants was reduced to Rs.82,793/- to be paid with interest
@ 6% p.a. from the date of plaint till the date of realization.
Challenging the same, the plaintiff has filed this second
appeal.
4. This second appeal was admitted on 22.06.2021 on
the following substantial question of law:-
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“ Whether the first appellate Court misapplied
Section 73 of The Indian Contract Act by interfering
with the award of damages under some of the heads
of loss quantified by the plaintiff? ”
5. The learned counsel appearing for the plaintiff
reiterated all the contentions set out in the memorandum of
grounds and called upon this Court to answer the substantial
question of law in favour of the appellant and interfere with
the impugned judgment and decree by restoring the decision
of the trial Court.
6. Per contra, the learned counsel appearing for the
respondents submitted that the impugned judgment and
decree do not call for any interference.
7. I carefully considered the rival contentions and went
through the evidence on record.
8. The learned counsel appearing for the respondents
raised very many contentions. He spread a large canvas.
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According to him, Ex.A.1 bill of lading is a multi-modal
transport of bill of lading and that the carrier can choose any
mode of transport and any route for transport and shipment.
When the goods were delivered, the seals were intact. He
drew my attention to Clause 20 of Ex.B.1 and placed reliance
of the decision of the Bombay High Court rendered in S.K.
Networks Company Ltd. Vs. Amulya Exports Ltd. and
Others reported in MANU/MH/1068/2006 and the decision of
the Hon'ble Supreme Court rendered in British India Steam
Navigation Co. Ltd. V. Shanmughavilas Cashew
Industries reported in MANU/SC/0467/1990. He relied on a
few other decisions such as
1.M/s.Carborandum Universal Ltd Vs. M/s.
M.G.International Transports GMBH on 30 October, 2014,
S.A.No.6 of 2008 Madras High Court.
2. Caravel Shipping Services Pvt. Ltd. V. Premier
Sea Foods Exim Pvt. Ltd. Kerala High Court (Sep 8, 2015).
3. Albany Ins. Co. V. M/V Sealand Uruguay, 2002 WL
1870289 (S.D.N.Y. 2002).
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9. The learned counsel appearing for the respondents
would strongly submit that the defendants are not liable. He
also questioned the very jurisdiction of the Indian Courts to
entertain the suit. Since as per relevant clause of Ex.B.1 the
Court at Trieste, Italy, alone can adjudicate the dispute. The
learned counsel relied on a catena of decisions in this regard.
He would also state as per Section 230 of The Indian Contract
Act, the first defendant who is a mere agent cannot be
fastened with any liability. His further contention is that since
no specific time had been mentioned in the contract for the
delivery of the cargo, the defendants cannot be fastened with
the liability even if the delivery was slightly delayed and more
so when the plaintiff had taken the goods. The learned counsel
filed detailed argument notes also. Though I heard the
submissions of the learned counsel at length, I am not in a
position to consider the said contentions for a very simple
reason. After the plaintiff had substantially succeeded before
the trial Court, the respondent herein filed appeal before the
Principal District Judge, Thoothukudi. The first appellate
Court framed the following seven issues:-
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1) Whether the civil Court in India has got jurisdiction to
try the dispute involved in the suit?
2) Whether the suit is bad for non-joinder of necessary
parties?
3. Whether the plaintiff has no locus standi to file the
suit?
4. Whether the 1st appellant / 1st defendant is not
responsible for the damages to the quality and quantity of the
cargo or not?
5. Whethe the appellants / defendants are liable for the
claim made under different heads by the plaintiff or not?
6. Whether the judgment and decree of the trial Court is
legally sustainable or not?
7. To what other relief?
10. The first point was answered against the
respondents herein and it was held that the civil Court in India
had the jurisdiction to try the dispute involved in the suit. It
was also held that the suit was not bad for non-joinder of
necessary parties. The plaintiff was declared to have locus
standi to maintain the suit. The first defendant was also held
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liable to answer the plaintiff's claim. The defendants were
found to have committed breach of contract on account of late
delivery of goods by adopting circuitous route and therefore
held liable for damages for the loss caused to the plaintiff.
Thus, almost every contention urged by the learned counsel
appearing for the respondents before this Court were
answered against them by the Courts below. The respondents
had not succeeded fully before the first appellate Court. Their
appeal was only partly allowed. They had been directed to pay
a sum of Rs.82,793/- with proportionate cost and interest.
Even though the first appellate Court rendered adverse
findings against the respondents herein, the respondents
herein did not file any cross appeal. If the respondents had
succeeded before the first appellate Court fully, they could
have definitely supported the same before this Court and also
questioned the adverse findings even without filing any formal
cross objection. But in this case without filing a cross appeal,
the respondents cannot question the adverse findings
rendered against them. Therefore, the scope of the present
appeal is only regarding the quantum of damages and nothing
else. The first appellate Court had held that the plaintiff was
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not entitled to damages under certain heads as quantified by
them. Therefore, the technical objections raised by the
learned counsel appearing for the respondents such as lack of
jurisdiction and non-maintainability of suit stand rejected.
11. The point for consideration is whether the first
appellate Court was justified in denying some of the claims of
the appellant herein. The first appellate Court had held that
the plaintiff was entitled to survey expenses of Rs.36,378/- as
per Ex.A.19 and expenses incurred for fumigation to the tune
of Rs.16,500/- as per Ex.A.18. The first appellate Court had
sustained the claim for shortfall and quantified it at
Rs.29,915/-. It however rejected the plaintiff's claim that they
spent Rs.1,78,500/- by purchasing equivalent quantity of
goods from the local market. The first appellate Court brushed
aside the plaintiff's claim with an observation that it was not
the case of the plaintiff that they always used to import wheat
and out of the imported wheat, they used to produce the
saleable goods. According to the first appellate Court, had
there not been any imported wheat, the plaintiff would have
only bought the wheat only from the local market and that in
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any event, since delivery of the wheat was taken, they would
have made good the loss. Therefore, the claim was rejected as
speculative.
12. Section 73 of The Indian Contract Act is as follows:-
73. Compensation for loss or damage
caused by breach of contract.
When a contract has been broken, the party who
suffers by such breach is entitled to receive, from the
party who has broken the contract, compensation for
any loss or damage caused to him thereby, which
naturally arose in the usual course of things from
such breach, or which the parties knew, when they
made the contract, to be likely to result from the
breach of it.
Such compensation is not to be given for any
remote and indirect loss or damage sustained by
reason of the breach.
Compensation for failure to discharge
obligation resembling those created by
contract.—When an obligation resembling those
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created by contract has been incurred and has not
been discharged, any person injured by the failure to
discharge it is entitled to receive the same
compensation from the party in default, as if such
person had contracted to discharge it and had
broken his contract.
This provision was considered by the Hon'ble Division Bench
of Madras High Court in Hajee Ismail Sait And Sons Vs.
Wilson And Co. (AIR 1919 Mad 1053). The rule is that
where there is a market at the place of delivery, the damages
are the difference between the contract price and the market
price on the date of delivery. That would be the case
particularly, where the buyer was under consequential
contractual obligations to third parties. The appellant is a
flour mill. The goods in question would be taken to the
plaintiff's factory premises and after grinding, the product
would be sold to third parties. The specific assertion of the
plaintiff is that he was under such obligation to sell the
product to third parties. The plaintiff had examined witnesses
in this regard and their testimony could not be challenged. On
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account of the delay in delivery, the plaintiff had made
purchases from PEC Ltd., and Food Corporation of India as
evidenced by Ex.A.24. The difference in cost had come to Rs.
1,78,000/-. The details were given in the plaint are as follows:-
“Average cost per MT 40,52,351 / 551.080 = Rs.7353.47
or Rs.7353.00. Purchase from PEC Ltd., 500.000 MT due to
non-arrival of containers Billed Rate : Rs.7020/- Clearing
Expenses – Rs.340 to Hari & Co. Frieght Rs.350/- Total =
7710/-
Difference in excess paid – Rs.7710.00 – Rs.7353 = Rs.357 MT.
Total difference – 357 x 500.00 Rs.1,78,500/-.”
The plaintiff was made to pay the extra cost of
Rs.1,78,500/- because the goods did not arrive in time. The
plaintiff was entitled to expect the goods to be delivered at the
delivery point during the middle of December 1999. By
making purchases from the local market, the plaintiff had
mitigated the loss that he could have otherwise claimed from
the defendants. Thus, the claim of the plaintiff under this head
falls clearly within four corners of Section 73 of The Indian
Contract Act. The first appellate Court erred in denying the
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claim under the aforesaid head. I therefore answer the
substantial question of law in favour of the appellant.
However, the claim of the loss of profit quantified at
Rs.1,04,526/- is clearly not sustainable. There is no dispute
that the plaintiff eventually received the goods. The damages
claimed by the plaintiff for having incurred extra cost by
making purchases from the local market and the claim of loss
of profits do not go together. The plaintiff had raised damages
under the following seven heads:-
i) Survey expenses
ii) Fumigation expenses
iii) Legal fees
iv) shortfall
v) purcahses from local market
vi) Loss of profit
vii) Interest claim to bankers
The trial Court accepted all heads except the claim incurred
towards legal fees. The first appellate Court negatived the
claim made under heads 5 to 7 also. I have already held that
the claim made towards extra cost involved under the
purchase of wheat from the local market is sustainable. I have
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also held that heads 5 and 6 do not go together. The seventh
claim is also not sustainable. The defendants are not
concerned about the financial arrangement which the plaintiff
may have with their banker. I uphold the denial of the seventh
claim also. The impugned judgment and decree is modified
and the defendants are directed to pay a sum of Rs.2,85,389/-
(Rupees Two Lakhs Eighty Five Thousand Three Hundred and
Eighty Nine only) with interest @ 6% p.a. from the date of
plaint till the date of realization. This second appeal is partly
allowed. No costs.
23.06.2021
Index : Yes / No
Internet : Yes/ No
PMU
Note: 1. Issue order copy on 23.05.2022.
2. In view of the present lock down owing to
COVID-19 pandemic, a web copy of the order may be
utilized for official purposes, but, ensuring that the
copy of the order that is presented is the correct
copy, shall be the responsibility of the
advocate/litigant concerned.
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G.R.SWAMINATHAN,J.
PMU
To:
1. The Principal District Judge,
Thoothukudi.
2. The Sub Judge,
Thoothukudi.
3. The Record Keeper, V.R.Section,
Madurai Bench of Madras High Court,
Madurai.
S.A.(MD)No.733 of 2012
23.06.2021
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https://www.mhc.tn.gov.in/judis
