2018 (4) TMI 1954 - HC - Indian Laws

Suit for recovery - conversion of the property of the plaintiff being the goods - guilty of the tort of negligence and/or guilty of wrongful conversion - forum selection clause in the Bills of Lading - suit barred by time limitation or not - burden to prove - HELD THAT - In the instant case the plaintiff has discharged the burden of nonpayment by production of the original Bill of Lading and the Banker s Certificate certifying non-payment. The ledger accounts for the relevant years are neither relevant nor necessary to prove the claim of the plaintiff. The very fact that the original Bills of Lading were returned to the Allahabad Bank by the Middle East Bank itself raises a strong presumption that payment has not been made. All the documents along with original copies of Bills of Lading were returned to Allahabad Bank by Middle East Bank. The defendants did not dispute that goods were delivered without production of the original Bills of Lading - Once the defendants are able to establish that the goods are released to the consignee with the consent of the plaintiff and the plaintiff has claimed a duty drawback of such exports the plaintiff could have been asked to produce the documents as put forth to the witnesses of the plaintiff. The first witness of the plaintiff during cross-examination has stated that the caption bill of lading namely the BL No. 30313 was At sight bill of lading . The witness explains the expression at sight by stating that said explanation implies that after the concerned goods reached at sight the buyer first makes the payment and then obtains the bill of lading on the basis of which it can get the goods released. It is the obligation of the importer first make the payment and thereafter obtain the bill of lading so that it can get the goods released on the basis of such bill of lading - In absence of such evidence and failure on the part of the defendant to establish that the goods covered by the bill of lading COK/30312/DXB were released with the consent of the plaintiff and the plaintiff has claimed duty drawback the defendants cannot escape their liability on account of conversion and liable for loss and damage suffered by the plaintiff. The defendants were under an obligation not to part with the goods without production of the original Bills of Lading. The plaintiff sues the defendant for this breach. The plaintiff has also specifically alleged conversion of goods - The very fact that the original Bill of Lading have been returned to the banker of the plaintiff without payment and failure on the part of the defendants to return the goods or account for the goods the defendants are guilty of conversion. In the instant case the plaintiff has relied upon several causes of action and made necessary pleadings in support of its claim for damages on account of conversion and had throughout the trial maintained that apparent is not the real state of things in view of the fact that the defendant Nos. 1 and 4 are one and the same carrying on same business and had jointly and severally made themselves liable for performance of the contract. The burden of proof in this regard has been ably discharged by the plaintiff. The plaintiff is successful in establish loss and damage against the defendants for conversion. The defendants were aware of the stipulation that the goods would be released only against the production of the original Bill of Lading and not otherwise. Still then the defendant admits to have delivered the goods to the consignee without the production of the original Bill of Lading. The original Bill of Lading has been returned to the plaintiff by its bankers. The defendants are unable to account for the goods. The defendants claimed to have delivered the goods to the consignee with the consent of the plaintiff has not been proved by the defendants at the trial. Under such circumstances the plaintiff can always claim for damages in tort - It is no doubt a duty of the plaintiff to establish at any rate prima facie that the suit is within the time and not barred by lapse of time. The plaintiff is able to establish that the claim against the defendant No. 1 is not barred by limitation. In the instant case the defendant No. 4 is the wholly owned subsidiary of the defendant No. 1 and even before the filing of the written statement has become defunct. The suit cannot proceed against the defendant No. 4. The bogey of defendant No. 4 as foreign principal is still canvassed to stave off a possible attack on the other defendants for realisation of the price of the goods entrusted to the defendants for delivery. The plaintiff has led evidence to show that the defendant No. 1 has clearly represented that it would be the obligation of the defendant No. 1 to ensure delivery of the goods through the defendant No. 4. The said representation read with the evidence and surrounding circumstances makes it clear that the defendant No. 1 had an arrangement with the defendant No. 4 and had jointly undertaken to deliver the goods to the oversees consignee. Although it may be true that the defendant No. 4 was in existence at the time of entering the contract but subsequently the defendant No. 4 became defunct and at least made to look so to defraud its creditor and whenever proceedings were filed in India against the defendant No. 4 the said non-existent defendant through the defendant No. 1 raised issue of jurisdiction by suppressing the fact that defendant No. 4 had ceased to exist since 2007 and for all intents and purposes the defendant No. 1 2 and 3 are the real persons - Under the Indian Law the standard of proof required to establish such nexus is one of probability and may be established having regard to the relation of the parties alleged to be acting in concert that is to show their conduct and their own interest from which it may be inferred that they must be acting together. The preponderance of evidence in absence of any contrary evidence leads to the conclusion that the circumstance are such as human experience would tell that it can safely be taken that the said defendants must be acting together. Although in the written statement defendant and defendants both are used singular and plural with regard to interchangeably describe the defendants it is clear from the reading of the written statement that the said written statement has been filed to safeguard interest of the defendant No. 4 as well. The entrustment of goods upon the defendants are not denied and an artificial contrive to separate the defendants have failed as the evidence on record has clearly supported the stand of the plaintiff that the defendant No. 1 is jointly and severally liable under the contract. The defendants have not come forward with any contrary evidence - Under such circumstances there shall be a decree for Rs. 37, 89, 000/- against the defendant No. 1 along with simple interest at the rate of 8% per annum from December 2000 until realisation. Application disposed off.

Summary

Issues Involved:
1. Jurisdiction of the Court
2. Limitation of the Suit
3. Entitlement to the Claimed Amount
4. Maintainability of the Suit against Defendants No. 1, 2, and 3
5. Other Reliefs

Analysis of Judgment:

Jurisdiction of the Court:
The defendants argued that the Bill of Lading contained a forum selection clause specifying Singapore courts as the jurisdiction. The plaintiff countered that the cause of action arose from negligence and conversion of goods, making the forum selection clause irrelevant. The court noted that the plaintiff had accepted the Bill of Lading containing the jurisdiction clause without protest. However, the court found that the plaintiff had entered into a contract with the defendants jointly and severally, and the defendant No. 1 had undertaken obligations independent of the Bill of Lading. Given the evidence, the court held that it had jurisdiction to try the suit.

Limitation of the Suit:
The defendants contended that the suit was barred by limitation under Rule 6 of Article III of the Indian Carriage of Goods by Sea Act, 1925, which requires suits to be brought within one year. The plaintiff argued that the cause of action arose in September 1998 when they learned of the breach. The court found that the plaintiff had established that the claim was not barred by limitation, as the suit was filed within three years from the date of knowledge of the breach. The court also noted that the provisions of the Hague Visby Rules were not applicable as the Bill of Lading did not contain an express statement to that effect.

Entitlement to the Claimed Amount:
The plaintiff claimed Rs. 37,89,000/- for the wrongful delivery of goods without the original Bill of Lading. The plaintiff provided evidence, including the original Bills of Lading and a certificate from Allahabad Bank confirming non-payment. The defendants failed to produce evidence to counter the plaintiff's claims. The court found that the plaintiff had successfully demonstrated that the goods were delivered without the original Bill of Lading and that they had not received payment. The court held that the defendants were liable for the amount claimed.

Maintainability of the Suit against Defendants No. 1, 2, and 3:
The defendants argued that defendant No. 1 acted as an agent for a disclosed foreign principal (defendant No. 4) and thus could not be sued under Section 230 of the Indian Contract Act. The plaintiff contended that defendants No. 1 and 4 were alter egos, controlled by defendants No. 2 and 3. The court found that the defendant No. 4 was a wholly-owned subsidiary of defendant No. 1 and had ceased to exist, making defendant No. 1 liable. The court also noted that the defendant No. 1 had undertaken obligations independent of the Bill of Lading, making the suit maintainable against defendants No. 1, 2, and 3.

Other Reliefs:
The plaintiff sought damages for the wrongful delivery of goods. The court assessed the damages based on the duty cast upon the defendants to deliver the goods only against the production of the original Bill of Lading. The court awarded the plaintiff Rs. 37,89,000/- along with simple interest at the rate of 8% per annum from December 2000 until realization.

Conclusion:
The court concluded that it had jurisdiction to try the suit, the suit was not barred by limitation, and the plaintiff was entitled to the claimed amount. The suit was maintainable against defendants No. 1, 2, and 3, and the court awarded the plaintiff Rs. 37,89,000/- along with interest.