TMI Blog2022 (9) TMI 1355X X X X Extracts X X X X X X X X Extracts X X X X ..... mmensurating with the value of the goods, as assessed by the plaintiff. In this view of the matter, the defendants cannot seek to draw any mileage from the fact that there is no evidence aliunde to establish the value of the goods. From this stand point, the learned Judge, City Civil Court committed no error in returning an affirmative finding in favour of the plaintiff. Is defendant no.3 liable for wrongful delivery of the goods by defendant no.4 to the consignee? - principal plank of the challenge to the impugned decree was that defendant no.3 being an agent of a disclosed principal i.e. defendant no.2, could not have been sued for the alleged wrongful delivery of the consignments by the another agent of defendant no.2 - HELD THAT:- If the evidence is read as a whole, the inference which Mr. Shah wants the Court to draw does not commend itself. Defendant no.3 had both the authority and choice, to select the agent at the port of destination. Defendant no.3, in the totality of the circumstances, cannot be permitted to wriggle out of the situation by simply contending that defendant no.4 was an agent of defendant no.2 at the port of destination. The aspect of the liability o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... little harsh and exorbitant. The appeal is allowed in part. - FIRST APPEAL NO. 417 OF 2015 - - - Dated:- 28-9-2022 - N. J. JAMADAR, J. Mr. Rajesh Shah, a/w Nirav Barot, i/b Maneksha and Sethna, for the Appellant. Ms. Hiral Thakkar, a/w Naresh Ratnani, i/b Ashwin Ankhad Asso., for Respondent no.1. JUDGMENT:- 1. This appeal is directed against a judgment and decree dated 18th October, 2014, passed by the learned Judge, City Civil Court, Bombay in SC Suit No.7175 of 1997 (the High Court Suit No.1861 of 1997). 2. For the sake of convenience and clarity, the parties are hereinafter referred to in the capacity in which they were arrayed before the trial Court. 3. Respondent no.1 (plaintiff) is a proprietary concern. It was engaged in the business of apparels. Respondent no.3 (defendant no.1) is an entity operated by respondent no.4 (defendant no.2), Allcargo Container Lines Ltd., a company registered under foreign laws. Appellant (defendant no.3) Allcargo Logistics Limited (Formerly known as Allcargo Movers (India) Pvt. Ltd.), is a company incorporated under the Companies Act, 1956. Respondent no.2 M/s. Walford Meadows Ltd. (defendant no.4) was the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to presume that the rest two consignments were lost. In any event, the goods shipped under rest two consignments were an intergral part of, and complementary to, the four consignments, which were wrongfully delivered and, thus, the goods in the last two consignments had also lost their utility. The plaintiff avers the defendants took an incorrect stand that the plaintiff had advised M/s. Universal to re-deliver the goods to M/s. Fashionette Industries Ltd. 7. The plaintiff asserts the defendants were duty bound to deliver the consignments covered under the Bills of Lading only upon presentation of the original Bills of Lading under the terms of the contract. However, the defendants committed breach of express term of contract of carriage by wrongfully and illegally delivering the consignments sans presentation of original Bills of Lading. In addition, according to the plaintiff, the defendants have committed breach of duty under the provisions of the Carriage of Goods by the Sea Act and also their duty as bailees. Hence, the plaintiff was constrained to institute the suit for the value of the goods along with interest at the rate of 24% p.a. which became payable, after 90 day ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e substance of the resistance put forth by defendant no.3 was that defendant no.3 was an agent of its disclosed principal i.e. defendant no.2. Thus, in view of the provisions contained in Section 230 of the Indian Contract Act, 1872, no liability could be fastened on defendant no.3 for the alleged wrongful act of M/s. Walford, defendant no.4, another agent of defendant no.2 at Mombassa. It was further contended that, on the own showing of the plaintiff, the alleged wrongful delivery was only of four out of six consignments. According to defendant no.3, the plaintiff is not entitled to raise any claim as regards the value of the balance two consignments. It was denied that the goods in the rest two consignments were rendered useless as they were an integral part of, and complementary to, the goods in the first four consignments. Defendant no.3 contended that the defendants were never put to notice about the said facts and, therefore, the plaintiff cannot claim damages on the said count. 12. Defendant no.3 categorically contended that being an agent of the disclosed principal, defendant no.3 was entrusted with the task of shipping goods at the Mumbai Port. Defendant no.3 had perfo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence adduced before the Court and the documents filed in support of the rival claims. I have also carefully perused the impugned judgment. 17. At the outset, Mr. Shah, the learned Counsel for the appellant, would urge that though during the course of the trial defendant nos.1 to 3 were represented by the same Advocate, the defence of defendant no.3 is quite distinct from that of defendant nos.1 and 2. The fact that defendant nos.1 and 2 have not assailed the decree would not impinge upon the defence of defendant no.3 as it rests on an established principal of law that being an agent of the disclosed principal defendant no.3 could not have been held liable for the alleged wrongful delivery of the goods by another agent of the disclosed principal 18. Mr. Shah strenuously submitted that the learned Judge, City Civil Court, committed a manifest error in recording a finding that the plaintiff succeeded in establishing the value of the goods despite there being a clear disclaimer in the Bills of Lading that the weight, measure, quantity, condition, contents and the value of the goods were unknown to the carrier . According to Mr. Shah, the learned Judge misdirected himself in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicate that the plaintiff had availed the benefit of duty drawback under Section 75 of the Customs Act. Duty drawback implies that the plaintiff had received entire price of the goods. The learned Judge, City Civil Court, according to Mr. Shah, failed to properly appreciate consequence of duty drawback, which was clearly admitted by PW-1. 23. In opposition to this Ms. Thakkar, the learned Counsel for respondent no.1 plaintiff, stoutly submitted none of the grounds urged on behalf of defendant no.3 are worthy of consideration. Ms. Thakkar laid emphasis on the fact that the wrongful delivery of the consignments by defendant no.4 to M/s. Universal is borne out by the correspondence exchanged between the defendants inter se and with M/s. Universal. It is also indisputable that the plaintiff did not receive the consideration. In the face of these twin facts, the defences sought to be raised by the defendants, especially defendant no.3, are creatures of afterthought. Contemporaneous record, according Ms. Thakker, would indicate that at no point of time defendant no.3 raised any dispute about the fact that defendant no.3 acted in the capacity of the agent of defendant no.3. On the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether the value of the goods consigned by the plaintiff is proved? (2) Is defendant no.3 liable for wrongful delivery of the goods by defendant no.4 to the consignee? (3) Whether the plaintiff s alleged failure to mitigate the loss dis-entitles the plaintiff from seeking damages? (4) What consequences flow from the benefit of duty-drawback allegedly availed by the plaintiff? Point No.1: 28. Before adverting to consider the aforesaid contentious issues it may be apposite to note that upto the point of delivery of goods by defendant no.4 to M/s. Universal, there is no element of controversy between the parties. The fact that the Bills of Lading were made TO ORDER is not at all in issue. Nor the fact that defendant no.4 delivered the consignments to the M/s. Universal without production of original Bills of Lading. Wrongful delivery of the goods in breach of express term of the contract is thus indubitable. The controversy between the parties revolves around the consequences which emanate from such wrongful delivery, the party who should suffer the consequences and the effect of the subsequent events, which allegedly occurred. 29. To retain emphasis and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant no.4 shared with M/s. Universal and the request made by the latter. Fifthly, the principals of defendant no.4 apprised defendant no.4 that the consignor plaintiff had lodged a demand for US$ 84,353.31 for release of the goods in breach of contract. Sixthly, defendant no.3 had debited the account of defendant no.4 with the said sum of US$ 84,353.31. Lastly, M/s. Universal was called upon to revert as defendant no.4 was to advice its principal in India. As is evident, a copy of the said communication was also marked to defendant no.3. 32. It would be contextually relevant to note the communication dated 17th September, 1996 (Exhibit-D) which appears to have forced defendant no.4 to address the aforesaid communication to M/s. Universal. WITH REF TO OUR MESSAGE DTD SEPT 2, 1996 ADD TO MR. DARIUS MCHARD (ENCL) AND ALSO MSG DTD SEPT 12, 1996 ADD TO MR. NDUNDU (ENCL) SHIPPER 13 IN POSSESSION OF ALL ORIGINAL BILLS OF LADING AND THE CARGO HAS BEEN RELEASED WITHOUT ACCOMPLISHING THE SAME. KINDLY HAVE THE SAME CHECKED AND REVERT, PLEASE ALSO ADVISE IF THIS CARGO WAS RELEASED AGAINST BANK GUARANTEE, PLS FAX US THE COPY OF THE SAME, NOTE THIS IS VERY SERIOUS CASE AND WE REQUE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods under the six Bills of Lading, the plaintiff had categorically asserted that the total amount of the goods consigned under the six Bills of Lading was US$ 84,353.31 equivalent to Rs.29,87,795/- approximately at the then prevailing rate of exchange. The plaintiff had lodged a formal claim for wrongful delivery of the goods without surrendering the original Bills of Lading. Thereupon, defendant no.3, on its part, lodged the claim with defendant no.4 for the wrongful delivery of the goods. Defendant no.4, in turn, claimed the said amount of US$ 84,353.31 from M/s. Universal. 35. On the aspect of the value of goods which were wrongfully delivered, the learned Judge observed that the plaintiff had not adduced evidence aliunde in proof of the value of the goods consigned. However, on the strength of the aforesaid correspondence, the learned Judge was persuaded to hold that the value of the goods was, in a sense, admitted by defendant nos.3 and 4. 36. Assailing the aforesaid approach, Mr. Shah would urge that in the absence of evidence in proof of the value of the goods it could not have been a matter of inference. Mr. Shah submitted that the plaintiff did not prove the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leged wrongful delivery by defendant no.4. 40. Mr. Shah banked upon the provisions contained in Section 230 of the Indian Contract Act, 1872 to bolster up the submissions that the defendant no.3 being an agent of the disclosed principal could not have been held personally liable. Section 230 of the Contract Act, 1872 reads as under: S.230. Agent cannot personally enforce, nor be bound by, contracts on behalf of principal.-In the absence of any contact to that effect an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them. -In the absence of any contact to that effect an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them. Presumption of contract to contrary.-Such a contract shall be presumed to exist in the following cases:- (1) where the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad; (2) where the agent does not disclose the name of his principal; (3) where the principal, though disclosed, cannot be sued. 41. From the text of Section 230, it becomes clear tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time the original B/L s for all 3 consignments are accomplished. 46. The relationship between defendant nos.3 and 4, in the contemplation of defendant no.4, also assumes critical significance. In the letter dated 19th September, 1996, extracted above, at more than one places, defendant no.3 was referred to as the principal of defendant no.4. Firstly, M/s. Universal was informed that defendant no.4 s Principals Allcargo had informed defendant no.4 that the plaintiff had lodged a claim. Secondly, M/s. Universal was called upon to reveal before the close of business on that day as defendant no.4 was to advise its principals in India. Thirdly, the said communication was addressed to defendant no.3 only and not to defendant no.2. 47. Mr. Shah made a faint attempt to wriggle out of the situation by canvasing a two-fold submission. One, a mere reference in the letter dated 13th September, 1996 to defendant no.3 as our office in Mombassa is not sufficient to establish the jural relationship. And in the letter dated 19th September, 1996 the use of the expression, our Principals Allcargo is to defendant no.2 alone. It is true that it may not be safe to draw an inference about the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the status of defendant no.3 cannot be construed to be that of a mere agent of a disclosed principal. If defendant no.3 wanted to dispel the position, it was incumbent upon the defendant no.3 to examine Mr. Shetty to clear the air and establish that defendant no.3 was a mere agent of a disclosed principal. 50. The manner in which defendant no.4 was selected as an agent at the port of delivery also bears upon the controversy. Mr. Randhive (DW-1) admitted in no uncertain terms that when defendant no.3 got Bill of Lading, it had no stamp of the agent at the port of discharge i.e. Walford, defendant no.4. Mr. Randhive (DW-1) further conceded that the stamp of Walford was put by defendant no.3 at the time of issue of Bill of Lading to the plaintiff. As to at whose instructions defendant no.4 was selected as the agent at the port of delivery, Mr. Randhive (DW-1) claimed that a list of agents was provided by defendant no.2. 51. Laying emphasis on the aforesaid assertion that defendant no.4 was the handling agent of defendant no.2, at the port of destination, Mr. Shah would urge that the absence of nexus between defendant nos.3 and 4 is crystal clear. If the evidence is read a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Urban Co-operative Bank Ltd. ors. 2011(2) Mh.L.J. 37.. a Division Bench of this Court enunciated the liability of the principal for the act of the agent as under: 9. From the press communique as well as from the terms of the loan it is clear that the RBI was to act as manager for the loan. The RBI in a sense was, an agent of the appellant, the State of Goa, for the purpose of managing the issue of the loan. Designated branches of the Sbi which were to receive the applications for the loan, were also to act as agents of the appellant State of Goa and/or sub-agents of the RBI which was the manager to the issue. In our view, the principal is responsible for the negligence of the agent during the course of his employment as an agent. The liability of the principal for the negligence and/or wrongful act of the agent is on the ground that the principal is a person who has selected the agent and the principal having delegated the performance of certain class of acts to the agent, the principal should bear the risk. Al that is necessary for holding the principal liable is that the acts should have been committed by the agent in the course of his employment. Although the principal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leged rejection of the goods has not been established. The two communications; first, dated 19th September, 1996 purported to be addressed by M/s. Universal to Walford and, second, the reply to the legal notice dated 2nd April, 1997 on behalf of M/s. Universal, which record the alleged rejection of goods, were not proved in evidence. 57. Even otherwise, it is imperative note that in the contemporaneous correspondence exchanged with the plaintiff and defendants inter se, there was no reference to the fact that the goods were allegedly rejected by M/s. Universal. On the contrary, the defendants banked upon correspondence indicating that the plaintiff had allegedly instructed M/s. Universal to redeliver the goods to M/s. Fashionette Industries Ltd.. It is a different matter that the said correspondence also appears to be in the nature of an unilateral offer without any acceptance by or confirmation from the plaintiff. 58. The defence of rejection of goods by M/s. Universal is required to be considered in the backdrop of indisputable position of wrongful delivery of the goods to M/s. Universal. At the very moment of the wrongful delivery, the defendants were guilty of breach of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of contract has occasioned the difficulty. Point No.4: 60. The issue of duty drawback allegedly availed by the plaintiff, even if taken at par, does not advance the cause of the submission to the extent desired by the appellant. Mr. Shah banked upon an admission in the cross-examination of Badarmal Modiram Jain (PW-1) that the plaintiff might have received the benefit of duty drawback. On this premise, an endeavour was made to bolster up a case that the plaintiff can be assumed to have received the consideration and, therefore, the plaintiff cannot again seek damages. 61. Plainly, the submission is against the weight of the evidence on record. It is nobodies case that either M/s. Universal, the consignee, or any other party had paid the value of the goods consigned under the Bills of Lading to the plaintiff, much less any evidence. An inferential submission that availing of benefit of duty drawback implies receipt of consideration is simply far fetched. Conversely, from the perusal of the provisions contained in Section 75 of the Customs Act, 1962 such an inference cannot be said to be automatic. The second proviso to sub-section (1) of Section 75 envisages a situat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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