TMI Blog2018 (4) TMI 1954X X X X Extracts X X X X X X X X Extracts X X X X ..... ants 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alisation 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 relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the defendants. The defendants are guilty of the tort of negligence and/or guilty of wrongful conversion. In such circumstances the forum selection clause in the Bills of Lading is immaterial. 3. In the background of such claim and counter-claim, it is necessary to briefly indicate the facts narrated in the Plaint and the Written Statement. 4. In the plaint, the plaintiff has stated that the plaintiff is, inter alia, engaged in the business of manufacture and sale of hosiery goods and fabrics. The plaintiff agreed to sell 100% cotton S (J) - 308 semi combed fabric (hereinafter referred to as the said goods ) 13697.850 Kgs @ USD 3.55 per KG to DXB Knits LLC of Ajman, Dubai, UAE (hereinafter referred to as the notified party). 5. The defendant No. 1 is engaged in the business of container services shipment. The plaintiff approached the defendant No. 1 for shipment of the said goods to Dubai. The defendant No. 1 on 15th January, 1998 issued an ocean Bill of Lading being No. COK/30312/DXB signed by it as an agent of Natper Lines (PTE) Ltd. The defendant No. 4, a company incorporated under the appropriate laws of Singapore for shipment of 221 cartons worth USD 48,627 conta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the plaintiff had wrongly, illegally and in breach of the conditions of carriage dealt with the said goods and purported to deliver the same to the said overseas buyer, DXB Knits without production of the original Bill of Lading. The plaintiff was informed by the agent of the defendant No. 4, M/s. Loyal Freight International Ltd., Dubai that the said goods were delivered to the overseas buyer without production of the Bill of Lading on the express instructions of the defendants. In the alternative, the defendants have wrongfully converted the said goods, the property of the plaintiff, for their own use and have wrongfully deprived the plaintiff of the same. In the further alternative, the defendants have acted negligently and in breach of duty owed to the plaintiff. The defendants acted negligently, inter alia, in delivering or causing the said goods to be delivered without production of the Bills of Lading. 12. The said goods covered under the said Bills of Lading have been wrongfully discharged and delivered by the defendants thereby causing financial loss and damage to the plaintiff at Calcutta. The plaintiff has further stated that on the express representation of the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith endorsement of the Middle East Bank, Dubai being the consignee under the said Bill of Lading. In the said letter, the plaintiff has categorically contended that if no such proof would be furnished relating to the receipt of the original Bill of Lading from the said Bank consignee, the defendants would be made liable for all costs, damage including freight. 16. The defendant No. 1 by a letter dated 22nd August, 1998 replied to the aforesaid letter in which the defendant No. 1 had acknowledged that the Singapore Office of the defendant No. 1 has received the aforesaid letter but denied its liability unless the plaintiff substantiates any monetary loss in the transaction by production of relevant Banker's Certificates. The defendants categorically stated that unless such certificate is produced, the claim of the plaintiff on the defendant No. 1 would not be valid. 17. Further the defendant No. 1 in the said letter dated 22nd August, 1998 asserted its right to effect delivery to the notified party and/or consignee upon taking a guarantee from them. The plaintiff contends that such guarantee must have been taken by the defendant No. 1 to indemnify the defendant No. 1 aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r assured that the goods would not be delivered without production of the original Bill of Lading, without intending to honour the said representation and/or assurance. The defendants induced the plaintiffs to dispatch the said goods on the said representation and/or assurance knowing fully well that the same would be delivered without the original Bill of Lading. The defendant No. 1 and the defendants released the delivery order relating to the said goods without the knowledge or information of the local agent at Dubai and suppressed the aforesaid facts from the local agent at Dubai. The defendant No. 1 and/or the defendants entered into secret negotiations and/or transactions with the said DXN Knits for delivery of the said goods without production of the Bill of Lading. The defendants have acted in breach of their duty and thereby gained advantage by misleading the plaintiff to its prejudice. The defendant Nos. 2 and 3 have set up the defendant No. 1 and 4 under a corporate veil to defraud creditors and avoid payment of their legitimate dues including those of the plaintiff. The defendant No. 1 and/or the defendants have wrongfully purported to insert clauses in the Bill of Ladi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e suit against the defendant No. 1 inasmuch as no part of the cause of action has arisen within the jurisdiction of this court. The goods have been delivered by the plaintiff at Cochin and shipped to Dubai. 27. Loyal Freight is a proper and necessary party in the suit. In absence of Loyal Freight, the instant suit cannot be properly and effectively adjudicated. The suit is bad for non-joinder of necessary party. The plaintiff has also not made the consignee a party in this suit. 28. The defendant No. 1 is a Public Limited Company and the shareholding of the defendant No. 1 is owned and controlled by the public at large. The defendant No. 4 is a company registered under the laws of Singapore. The defendant No. 3 is a Director of the defendant No. 1 only with effect from July, 1999 and was not a director of defendant No. 1 at the material point of time. 29. The plaintiff has shipped 16742.75 Kgs of goods under two shipping bills in a sealed container said to contain 270 cartons weighing 16742.75 Kgs of Indian Origin, the value whereof, however, was not declared by the plaintiff at the time of shipment of the said goods from Cochin to Dubai. The plaintiff has suppressed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars has forwarded the same to the plaintiff at Calcutta. 32. The goods were delivered on 9th March, 1998 and the suit has been filed on November 29, 2000. The suit is barred by limitation in view of Rule 6 of Article III of the Schedule to the Indian Carriage of Goods by Sea Act, 1925 as well as Clauses (f) and (g) of Clause VI of the Standard Trading Condition printed on the reverse side of the Bills of Lading. The carriage of goods by sea is governed by the Hague Visby Rules which clearly provides that definitions and limits of liability provided for in the Rules shall apply in any action against the carrier in respect of lost or damaged goods covered by contract of carriage where the action be found in contract or in tort. 33. On the basis of the pleadings and documents disclosed on 8th June, 2016 the following issues were settled for trial: i. Does this Court has jurisdiction to try, determine and adjudicate the suit? ii. Is the suit barred by the law of limitation? iii. Is the plaintiff entitled to a sum of Rs. 37,89,000/- along with interim and further interest thereon, as claimed in the plaint, against the defendants jointly and/or severally? iv. Is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32; (iv) Unreported decision of the Hon'ble Delhi High Court in Gupta Pigments v. Natpar Lines (S) PTE Ltd. Anr. in FAO No. 146 of 1999 decided on 09.12.2010. 41. Mr. Saha has referred to paragraph 2(i), paragraph 6 and paragraph 7 of the written statement and submitted that the defendant No. 1 has categorically denied that it had issued a bill of lading at Calcutta or that payment of freight was made to it by the plaintiff at 39 Kali Krishna Tagore Street, Kolkata. The contention of the plaintiff in this regard is incorrect. In any event, in view of the forum selection clause in the bill of lading, the plaintiff could not have instituted the instant suit in this Court. In an attempt to wriggle out of the forum selection clause, the plaintiff has attempted to contend that as the original bills of lading were returned to it, the suit was not filed under the same and as such the forum selection clause contained therein could have no application. The contract between the parties is contained in the bill of lading. It is evident from paragraph 9(a) of the plaint that the plaintiff has first sued on an alleged breach of the contract contained in the bill of lading. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e general nature of such loss or damage, shall have been given in writing to the carrier or to his representative at the place of delivery before or at the time of removal of the goods into the custody of the person entitled to delivery thereof under this bill of lading or, if the loss or damage is not apparent within three consecutive days thereafter. Clause g - Time bar- The carrier shall be discharged of all liability unless suit is brought in the proper forum and written notice thereof received by the carrier within 12 months after delivery of the goods or the date when the goods should have been delivered. 47. The Bill of Lading is governed by the Hague Visby Rules amended by the Protocol singed at Brussels on 23rd February, 1968. India is a signatory to the Hague Visby Rules and as such the Bill of Lading is an exclusive special contract. The Hague Visby Rules, inter alia, provides as follows:- The defences and limits of liability provide for in these Rules shall apply in any action against the carrier in respect of loss or damage to goods covered by a contract of carriage whether the action be found in contract or in tort . 48. The learned Senior Counsel has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment under BL No. COK/30313/DXB was admittedly delivered. 51. Mr. Saha submits that the plaintiff has failed to prove its case. The plaintiff's allegations that delivery of goods has been made without the Bill of Lading and that the plaintiff has not received payment for such goods has been specifically denied by the defendant Nos. 1 to 3 in paragraphs 2(v), 2(vi), 5, 8, 9, 10 and 14 of the written statement. 52. Mr. Saha submits that even if it is assumed for the sake of argument that the goods were, in fact, delivered without the Bill of Lading, the onus would still be on the plaintiff to prove that it did not receive payment for the same. This being the plaintiff's positive case, the burden of prove lies on the plaintiff. Mr. Saha has referred to Sections 102, 103 and 106 of the Indian Evidence Act, 1872 and referred to paragraphs 4.02 and 4.05 of Phipson on Evidence (4th Edition) and Queen's Bench decision reported in (1883) 11 QBD 440 at 457 (Abrath v. The North Eastern Railway Company) in which it is held that where an allegation, whether affirmative or negative, forms an essential part of a party's case, the proof of such allegation rests on him. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alternative cases of negligence and conversion. Notwithstanding the alternative cases pleaded by it, the plaintiff can succeed in its claim only if it succeeds in proving actual damage suffered. Injuria sine damno does not give rise to an actionable claim. The burden is on the plaintiff to prove loss or damage for non receipt of payment against goods delivered without production of the Bill of Lading as a consequence of conversion, negligence or breach of contract by the defendant. 56. It is submitted that although the plaintiff could have easily discharged its burden of proving non receipt of payment for the goods delivered, by disclosing its balance sheets, party wise ledgers, export ledgers, statutory returns that are required to be filed in connection with exports and its duty drawback registers and correspondences with its buyer on the alleged non-receipt of invoice value, it steadfastly refused to do so, and that too without any just cause. 57. Mr. Saha in this regard has referred to Chapter 6 of the Exchange Control Manual of the Reserve Bank of India, Clause 6.A.7 and Rule 8 under Foreign Exchange Regulation Rules, 1974 i.e. FERA Rules under the FERA Act, 1973 which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment passed in the Dubai suit filed by the plaintiff, Plaint in the Suit No. 496 of 1999 and submitted that although the said witness was asked to produce and disclose the said documents, the witness has refused to give any satisfactory reply for not disclosing the said documents. Mr. Saha submits that although the plaintiff is in possession of best evidence and is obliged to disclose the best evidence, the plaintiff has withheld such evidence. Mr. Saha submits that it is extremely unusual for the plaintiff for not taking any immediate steps for realization of the payments from the foreign buyer which the plaintiff alleged to have not been received. Realization of the export proceeds within the stipulated time would be in consonance with the common course of business in relation to export activity and as such, receipt of payment by the plaintiff for the goods delivered can be presumed under Sections 16 and 114(f) of the Indian Evidence Act, 1872. It is submitted that mere statement of the witness that the plaintiff has not received payment against goods delivered is not sufficient for the plaintiff to establish non-receipt of payment. In the circumstances, the onus did not shift ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the plaintiff. Withholding of the best evidence decreases the reliability of any other evidence that is produced and the version of the plaintiff's case needs to be disbelieved. 63. Mr. Saha in this regard has relied upon Union of India v. Ibrahim Uddin Anr. reported in : (2012) 8 SCC 148 (paragraphs 12, 24 and 25) and Swaran Singh Ors. v. State of Punjab reported in (1976)4 SCC 369 (paragraph 13). 64. Mr. Saha submits that the claim is frivolous and collusive. The plaintiff is in collusion with the consignee. The plaintiff has been in business with DXB Knits LLC Amjan UAE for a long time and has concluded several transactions with them. The plaintiff remains closely associated with DXB Knits and has continued to transact business with them even after the dispute complained of in this suit. Mr. Saha has referred to Question Nos. 134, 151 to 159, 162 to 168, 199 to 213, 233, 235 to 245 and 329 to 335 to substantiate his argument that course of conduct between the buyer and seller as emerged from the evidence leads to the inference that the plaintiff received payment in respect of the goods from DXB Knits and as such continued to be do business with it beyond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 'C', being a diary lodged by the plaintiff with the Posta Police Station, the plaintiff has stated that the original Bills of Lading and the originals of the documents of shipment alleged to have been returned to the plaintiff by the Allahabad Bank under the cover of its letter dated September 1, 1998 was lost while the plaintiff was shifting its office. The plaintiff has offered no explanation whatsoever as to how or when the original Bills of Lading were once again found or as to why although three original Bills of Lading were found, the original documents of shipment including the original Packing List, the original Commercial Invoice, the original G.R. Form and other shipping documents were never found. 67. Mr. Saha submits that the copy of Form 32 (Exhibit- A) obtained from the ROC Singapore, Bills of Lading (Exhibits- E and F), copies of the packing list and commercial invoice and Bill of exchange are forged and fabricated. Mr. Saha in this regard has relied upon Question Nos. 601-621 in cross-examination of Mr. Chandra Prakash Poddar in relation to Exhibit-A and submits that the said form, in any event, shows that the defendant No. 3 became a director of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of conversion of the plaintiff's goods by the defendants. The plaintiff's first witness clearly admitted that the buyer had tendered the original Bill of Lading to the Middle East Bank. In view of such admission by the plaintiff that the original of lading had reached DXB Knits, it is only DXB Knits who could have sued for conversion of the goods covered by the bill of lading and not the plaintiff. 71. In this regard, Mr. Saha has relied upon the following decisions:- a) Commissioners for the Port of Calcutta v. General Trading Corporation Ltd. Anr. reported at : AIR 1964 Cal 290 (para 69) b) Charles Barber And Ors. v. William Meyerstein reported at 1870 LR HL 317 (at 332) c) (1884) 10 App Cas 74. 72. Mr. Saha submits that the plaintiff in Paragraph 4 of the plaint has admitted that the bill of lading was issued by the defendant No. 1 as the agent of the defendant No. 4. The authority and obligation of the defendant No. 1 as an agent of the defendant No. 4 was limited to shipping the goods of the plaintiff to Dubai, from where the delivery agent of the defendant No. 4 at Dubai was to collect the goods and deliver the same to the consignee. 73. The b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into the contract with the defendant No. 1 as the agent of the defendant No. 4, such allegation is wholly irrelevant and is an attempt to mislead this Hon'ble Court. 77. The fact that the plaintiff was aware of the relationship between defendant No. 1 and the defendant No. 4 since the incipient stages of the contract, and the admitted fact that the defendant No. 1 signed the Bill of Lading not in its own name, but as an agent of the defendant No. 4 effectively rebuts the presumption of a contact to the country as envisaged in Sub-section (1) of Section 230 of the Indian Contract Act, 1872. Mr. Saha in this connection has relied upon the following decisions:- a) Midland Overseas v. M.V. CMBT Tana and Ors. reported in : AIR 1999 Bom 401; b) Jenkins v. Hutchinson reported in : 13 QB 744; c) Gadd v. Houghton reported in (1876)1 Ex D 357; d) Deoki Nandan Sons v. Ram Laq Qulak and Lockwood Bros. reported in : AIR 1923 Lah 296 (paras 5, 6 and 7); e) West Bengal Essential Commodities Supply Corporation Limited v. Korean Foreign Transportation Co. Anr. reported in : AIR 2002 Cal 211; f) Marine Container Services South (P) Ltd. V. Go Go Garments reported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that that the plaintiff has no cause of action against the defendant No. 1 and the plaint filed in the suit does not disclose any. 82. Per contra, Mr. Ratnanko Banerjee, the learned Senior Counsel appearing on behalf of the plaintiff has submitted that the objection with regard to the jurisdiction of this Court is misconceived. 83. The instant suit has not been filed based on the Bill of Lading. The principal cause of action in the instant suit is conversion of the property of the plaintiff being the goods. The defendants have acted in breach of its duties in giving delivery of the plaintiff's goods to the notified party without the original Bill of Lading. As such the cause of action in the plaint is negligence/tortious liability on the part of the defendants, in giving delivery of the plaintiff's goods to the notified party without the original Bill of Lading. The plaintiff is not suing the defendants under the Bill of Lading. 84. The jurisdictional clause in the Bill of Lading will have no application on the question of jurisdiction because the jurisdiction of this Hon'ble Court is on the basis of the cause of action of the plaintiff which has arisen within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cochin to Dubai Port by ship. The goods reached Dubai port on 2nd February, 1998. The goods were delivered to DXB Knits LLC, the notified party, by the defendants on 7th/9th March, 1998 without the original Bill of Lading being produced by the notified party. 90. This fact of delivery of the goods by the defendants to the notified party without production of the original Bill of Lading came to the plaintiff's knowledge in or about August/September, 1998 when plaintiff's banker informed the plaintiff about return of the original Bill of Lading by Middle East Bank, Dubai. 91. On or about 8th September, 1999 a suit being C.S. No. 496 of 1999 was filed by the plaintiff before this Hon'ble Court which was subsequently withdrawn on 7th November, 2000 with a liberty to the plaintiff to file afresh on the self-same cause of action. 92. The instant suit was filed on 25th November, 2000. The cause of action of the instant suit arose in or about September 1998 upon the plaintiff coming to know of the act of breach of contractual obligations by the defendants and/or guilty of tort of negligence and/or guilty of wrongfully conversion and/or defaulter of the said goods an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... early averred and justified that the claim is not barred by limitation. Mr. Banerjee submits that the provisions of Hague Visby Rules mentioned in the Bill of Lading, has no manner of application. Mr. Banerjee has referred to Section 28 of the Contract Act and submits that the said Section clearly recognizes that an agreement which restricts time limit for enforcing a legal right of a party by a usual legal proceeding on expiry of a specific period is void. Accordingly, the time limit of one year as specified in the contract/agreement as per the Hague Visby Rules to file the suit and/or any proceeding is void under Section 28 of the Indian Contract Act. In this regard, the learned Senior Counsel has referred to two decisions of the Delhi High Court in O.M.P. 654/2008- M/s. Indian Oil Corporation Ltd. v. M/s. Ktl Mayfair Inc. Anr. and O.M.P. 233/2009 - Ktl Mayfair Inc v. M/s. Indian Oil Corporation Ltd. and 2016 SCC Online Del 4582 {FAO (OS) 614/2010- Indian Oil Corporation Ltd. v. KTL Mayfair Inc.). 99. It is submitted that in any event, the defence of limitation under the Hague Visby Rules is not available to the defendant No. 1. The defendant No. 1 is neither the owner nor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the goods without Bill of Lading. 104. The defence of lack of jurisdiction the same is also not available to the defendant No. 1. The defence of the jurisdiction clause mentioned in the Bill of Lading was available only to defendant No. 4 being a company incorporated in Singapore. 105. The written statement though filed by the defendant No. 1, Ram Chandra Jadav, the Accounts Officer of the defendant No. 1, who has verified and affirmed the written statement on 21st July, 2007, has stated that he has been duly authorized by the defendant Nos. 2 to 4 to make and affirm the written statement on behalf of the said defendants. Mr. Banerjee submits that under such circumstances, it has to be presumed that the written statement is filed on behalf of the defendants. 106. Mr. Banerjee submits that since the defendants have tried to bring out separate identity of each of the defendants which is no more tenable by reason of the agent of the defendant has, in fact, made all communications to the defendant No. 1 treating the defendant No. 1 as the main person inasmuch as having regard to the fact that the defendant No. 4 has ceased to exist which fact has been conveniently sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 4. The defendant No. 4 is the wholly owned subsidiary of defendant No. 1. Thus defendant No. 1 and 4 were companies owned and controlled by defendant Nos. 2 and 3 and/or their family members. It is, thus, clearly evident that the defendant No. 1 is the principal company controlling the affairs of defendant No. 4. Since the year 2007 defendant No. 4 does not exist having been struck off by the Registrar of Companies, Government of Singapore and as such the defendant No. 4 presently cannot be sued. Accordingly, conditions of Section 230 of the Contract Act would be satisfied and that the suit as against the defendant Nos. 1, 2 and 3 would be maintainable and the defendant No. 1 will have the liability for the conversion of goods under the Bill of Lading. Even if the contention of defendant No. 1 is correct, the defendant No. 4 is the principal, then also by reason of Section 230(3) of the Contract Act as the principal cannot be sued it will be presumed that the contract can be personally enforced against the agent being defendant No. 1. In the alternative, this is a case of tort of conversion. It is submitted that Section 233 of the Contract Act is also relevant in this case as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same being already struck off in 2007. The fact shows that defendant Nos. 1, 2 and 3 after obtaining the goods and permitting the same to be converted are now relying on the erstwhile corporate existence of defendant No. 4 to try and avoid liability. As on date of decree, the defendant No. 4 also does not exist having been struck off and, therefore, the plaintiff will be without remedy and will not be able to have satisfaction of its claim in a case where the goods have been clearly converted, having been delivered without any rightful authority and without original Bill of Lading. This liability is an absolute liability of defendant No. 1. 113. The freight for the carriage of the goods has been paid to defendant No. 1. The title of the goods still remain with the plaintiff because the Bill of Lading which is the document of title is with the plaintiff and therefore the defendant No. 1 and the other defendants are guilty of tort of conversion. 114. Thus, it cannot be said that the instant suit is not maintainable against defendant No. 1, 2 and 3. 115. Mr. Banerjee has relied upon an unreported decision of this Court in the goods of: Kamal Kumar Mitra and in the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SON reported at 1892 (1) QBD 495 where a person without authority delivers another's goods in a manner adverse to the right of the person really entitled. 119. In respect of the plaintiff's entitlement to a sum of Rs. 37,89,000/- along with interest against the defendants jointly and/or severally, Mr. Banerjee submits that it is clearly mentioned in the Bill of Lading being No. COK/30312/DXB dated 15th January, 1998 being Exhibit-'E' that Consignee- To order of Middle East Bank, Alrioa Branch, P.O. Box 5547, Dubai -UAE which in business parlance means at sight Bill of Lading. The fact that the Bill of Lading was at sight is an admitted position. Mr. Banerjee has referred to question Nos. 290, 291, 292 and 293 in the cross-examination of the plaintiff's witness and submits that in answer to said questions the witness has clearly explained that the expression at sight implies that after the concerned goods reaches the site, the buyer first makes the payment and then obtains the Bill of Lading on the basis of which it can get the goods released. 120. Mr. Banerjee has referred to the letter dated 21st January, 1998 issued by Allahabad Bank, Park Str ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o to the notified party without obtaining the original Bill of Lading. The original Bill of Lading remained in the custody of Middle East Bank Dubai. The notified party was required to pay the price of the goods to the Middle East Bank, Dubai and obtain the original Bill of Lading from the bank. It was thereafter, upon production of the original Bill of Lading the notified party was required to take delivery of the goods from the defendants. In the instant case the defendants delivered the goods to the notified party without the original Bill of Lading being produced the notified party. Thus the plaintiff suffered loss for breach of contractual obligations by the defendants. 125. Mr. Banerjee submits that the defendants are deliberately misconstruing the scope of the suit. The suit as against the defendant No. 1 is not on the basis that it had signed the Bill of Lading as the agent of the defendant No. 4, but it is also on the basis that he is bound as a principal. The defendant No. 1 by reason of its wrongful, illegal and fraudulent representation as well as by reason of his negligence made itself liable to the plaintiff for delivery of the cargo without production of the orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter of transaction on behalf of the principal. The particulars of fraud are specifically stated in paragraph 16 of the plaint. 129. Mr. Banerjee relying upon the decision of the English Court in SzeHai Tong Bank Ltd. And Rambler Cycle Co. Ltd. reported at 1959 Appeal Cases 576 and submitted that it is an accepted principle that goods cannot be delivered without original Bills of Lading being handed over. 130. The defendant No. 1 along with other defendants acting in collusion are guilty of the tort of conversion of the goods of the plaintiff. Therefore, the defendant No. 1 is personally liable in tort also for the value of the goods to the plaintiff. 131. The defence of the defendant is that the plaintiff has received payment from DXB Knits LLC, the Dubai Buyer. There has been no denial to the fact that goods were delivered without production of original Bills of Lading. However, the defendant has failed to lead evidence to prove such defence as the onus of proving such defence (which is a positive fact) would be on the defendant. The plaintiff has denied the fact of receiving the payment from Dubai buyer and, therefore, there cannot be any negative burden on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ephonic conversation with the defendant No. 1 with regard to the Bill of Lading in question where the plaintiff had expressed its displeasure in the manner in which consignment was released on the basis of a guarantee furnished by the consignee. It appears from the tenor of the letter dated 13th October, 1998 that the goods were released on the basis of a guarantee given by the consignee which, however, is contrary to the terms of the contract and evoked discontent at the plaintiff's end. The plaintiff did not accept the contention of the defendant that the goods could be released against any guarantee or letter issued by the consignee. In fact in the said letter, the plaintiff has drawn attention to a facsimile message dated 22nd August, 1998 sent by Loyal Freight to the defendant No. 1 at its Madras Office with kind attention of Mr. Azad Parekh where Loyal Freight had reiterated that the goods were released without authority and without the production of the Bill of Lading. The letter also refers to a communication made by Loyal Freight to Dubai Chambers of Commerce which reads:- In this case Natpar Lines are fully liable for the consequence as their representative has co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll the documents pertaining to the Bill USD 48627 and the bill amount has remained unpaid and all the documents along with the said bill are lying with the said bank. The objection seems to be that the said letters of Allahabad Bank are photocopies and unless the plaintiff satisfies that in spite of due diligence, the original letters could not be found and/or traced only then the Xerox copy of the said letters could be produced. 138. The witness has also stated that the defendants have represented to the plaintiff that they had an office in Singapore and also in Kolkata and are operating as shipping agents for Dubai and Middle East countries and they were in a position to transport the consignments at Dubai. The defendants convinced the plaintiff that the shipment would be delivered on time and the delivery of the Bills of Lading would be handed over only after the consignee makes the payment and, thereafter, the goods would be delivered to the consignee. It was on the basis of such assurance that the necessary documents were prepared and sent to Middle East Bank through Allahabad Bank. Middle East Bank was advised to deliver the documents only after the payment was received f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accumulated losses of defendant No. 4 exceeded its paid up capital, however, no provision has been made by the management at that stage since it did not consider this to be of a permanent nature. The defendant No. 4 owed a sum of Rs. 3,90,97,782/- to the defendant No. 1. He has further deposed that the defendant No. 4 was incorporated on 12th June, 1996 and the last account was made up to 31st March, 1998 and, thereafter, it remained virtually closed. The Company for all practical purposes was closed since 29th May, 2009. Apurva Natvar Parikh, is the director of two companies, namely, Natvar Lines PTE Ltd. appointed on 12th July, 1996 and Natvar Parikh Industries appointed on 3rd January, 1995. Azad Natvar Parikh is another director and he has also a family member of the defendant No. 2. The witness has referred to a document issued by ACRA having the same status as ROC in India, ACRA stands for Accounting and Corporate Regulatory Authority. The said authority has issued a unique identity number of defendant No. 4 wherefrom all the details were found, Sujan Azad Parikh is the Managing Director of the defendant No. 1 and he is a family member of the defendant No. 2. They both contro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Conditions (1996). Copy shall be furnished at request or may be inspected at our premises. 146. If the Court on the basis of the evidence arrived at a finding that an independent contract exists between the plaintiff and the defendant No. 1 then the objection raised on behalf of the defendants as to jurisdiction and limitation must fail. 147. If one looks at the Bill of Lading and the printed jurisdiction and law clause in the Bill of Lading, one can easily assume that for all disputes concerning and connected with the said Bill of Lading would be tried and decided at Singapore in terms of the said jurisdictional clause. When the terms are reduced in writing, no amount of oral evidence can be allowed to alter the written terms. This only takes care of the defendant No. 4. However, if there is an independent obligation of the defendant No. 1 to discharge and there is no such jurisdictional clause then on the basis of the evidence it has to be ascertained if this Court has jurisdiction to receive, try and determine the lis between the plaintiff and the defendant No. 1. 148. The plaintiff has clearly asserted that the plaintiff has entered into the contract with the defendan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow obvious that Mr. Datta could not have affirmed the affidavit on behalf of defendant No. 4 since the name of the defendant No. 4 was struck off on 5th July, 2007. In the affidavit of documents, he has stated that the defendants are in possession of the following documents:- a) Copy of Bill of Lading No. COK/30312/DXB dated 15th January, 1998. b) Copy of Bill of Lading No. COK/30313/DXB dated 15th January, 1998. c) Copy of Shipping Bill No. 1166 dated 12th January, 1998 pertaining to Bill of Lading No. COK/30312/DXB dated 15th January, 1998. d) Copy of Shipping Bill No. 1168 dated 12th January, 1998 pertaining to Bill of Lading No. COK/30313/DXB dated 15th January, 1998. e) Copy of Delivery Order valid till 9th March, 1998. f) Copy of fax letter dated 20th August, 1998 sent by plaintiff to NPIL. g) Copy of fax letter dated 19th August, 1998 sent by plaintiff to their C F Agent M/s. Leslie Leslie and copy of the same was marked to NPIL. h) Copy of Form 32 filed with ROC in respect of appointment of Mr. Sujan Azad Parikh from 2nd July, 1999. 150. In the written statement, the defendants have specifically asserted in Paragraph 5 that the consignee wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ex parte , while Ch. 9 Rule 2 of our Rules provides that no written statement will be allowed to be filed if no appearance has been entered. Thus then there are two consequences of not entering appearance under the Rules. One is that the Suit is liable to be heard ex parte and the other is that no written statement can be filed. In that context, I am not inclined to impose more punishment than those two so explicitly stated by the Rules. Therefore I am of the opinion that a party subject to these handicaps imposed by the Rules can still appear under the Civil Procedure Code when the suit is called on for hearing from the undefended list, not only to cross-examine the witnesses of the plaintiff and demolish in such manner the plaintiff's case on evidence that the Court will not pass any decree in the plaintiff's favour but also to make such arguments and submissions on law and on such evidence as the plaintiff may have brought to the Court. These are, in my opinion, valuable rights under the Code which are not taken away by any Rules of the original side. I have not been able to persuade myself to take the view that a suit can only be defended by filing a written stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciple that where a plaintiff comes to the court he must prove his case should not be whittled down even in a case where no defendant appears. It will at once be clear that to say that the Court can only do this by looking the plaintiff's evidence and pleadings supplemented by such questions as the court may consider necessary and to completely eliminate any type of assistance from the defendant in this task will place the court under a great handicap in discovering the truth or otherwise of the plaintiff's statements. For after all, the court on its own motion, can do very little to ascertain the truth or otherwise of the plaintiff's averments and it is only the opposite party that will be more familiar with the detailed facts of a particular case and that can assist the court in pointing out defects, weaknesses, errors and inconsistencies of the plaintiff's case. We, therefore, think that the defendant should be allowed his right of cross-examination and arguments. But we are equally clear that this right should be subject to certain important safeguards. The first of these is that the defendant cannot be allowed to lead his own evidence. None of the observatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to avoid any real prejudice to the interests of the plaintiff. 156. The plaintiff has to prove its claim. The success of the plaintiff is not dependent upon the weakness of the defence. It is because of this, the Court is required to assess irrespective of the defendant's case, the merit of the case of the plaintiff. 157. Proof , which is the effect of evidence led, is defined by the provisions of S. 3 of the Evidence Act. The effect of evidence has to be distinguished from the duty or burden of showing to the court what conclusions it should reach. This duty is called the onus probandi , which is placed upon one of the parties in accordance with appropriate provisions of law applicable to various situations; but, the effect of evidence led is a matter of inference or a conclusion to be arrived at by the court. 158. When a party adduces his evidence in proof of the fact in issue, then it has to be seen what the other side has to say on the matter which is called shifting of the burden of proof. However, the person on whose behalf the Judge wishes to hear evidence should offer none but content himself with giving his own observations and criticisms on the evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e line of demarcation, even when visible, is often overlooked. A presumption which is regarded by some judges and text-writers as one of law is treated by others as one of fact, or of missed law and fact; indeed, the same judges have not frequently placed the same presumption in different categories at different times. (Phipson on Evidence, 4th Edition) 161. The phrase, burden of proof, has three meanings:- (i) the persuasive burden, the burden of proof as a matter of law and pleading the burden of establishing a case, whether by preponderance of evidence or beyond a reasonable doubt. (ii) the evidential burden, the burden of proof in the sense of adducing evidence. (iii) the burden of establishing the admissibility of evidence. (See Phipson on Evidence, 4th Edition) 162. Section 101 of the Act lays down the rule that whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exits. In other words it is the same as saying that the burden of proof lies on the party who substantially asserts the affirmative of the issue and not on the party who denies it. The burde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence, in view of Section 102 of the Evidence Act. In terms of Section 102 the initial onus is always on the plaintiff and if he discharges that onus and makes out a case which entitles him to a relief, the onus shifts to the defendant to prove those circumstances, if any, which would disentitle the plaintiff to the same. 167. Burden of proof would mean that a party has to prove an allegation before he is entitled to a judgment in his favour. The one or the other of the contending parties has to introduce evidence on a contested issue. The question of onus is material only where the party on which it is placed would eventually lose if he failed to discharge the same. Where, however, parties joined the issue, led evidence, such evidence can be weighed in order to determine the issue. The question of burden becomes academic. (Bala Shankar Maha Shanker Bhattjee v. Charity Commr., Gujarat State, 1995 Supp (1) SCC 485: AIR 1995 SC 167) 168. The tests that can conveniently be adopted for ascertaining on whom the burden of proof lies are first, to consider which party would succeed if no evidence were given on either side, and secondly to examine what would be the effect of str ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8: AIR 2006 SC 1971 : (2006) 6 Mah LJ 280) 171. To the general rule, i.e. that the burden of proof is on the person who substantially asserts the affirmative of the issue there are two exceptions. (1) When any fact is specially within the knowledge of a party, the burden of proving that fact is upon that party, (2) where there is a rebuttable presumptions of law in favour of an affirmative allegation, the party who supports the negative must call witnesses to rebut the presumption. 172. Mr. Saha has strenuously argued that the plaintiff has not received payment and the defendant No. 1 is responsible for the performance of the contract. The further argument appears to be that the eight months delay in pursuing the claim is not an accepted human behaviour particularly when the plaintiff is engaged in commercial activities and the onus is on the plaintiff to clear such doubts. Mr. Saha refers to Smithwick v. The National Coal Board reported at 1950(2) KB 335 and submits that it has been the view of Lord Justice Denning that even if in a situation like this the defendant calls no evidence the burden to dispel such doubts always rests with the plaintiff. 173. In Smithwick (s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e at the trial. The plaintiff has disclosed documents including the Allahabad Bank Certificate certifying that the Bill of Lading and documents have been returned by the Middle East Bank unpaid. The plaintiff has adduced evidence by bringing on record those documents showing that payments have not been received. The contents of the letters exchanged by and between the parties would show that the defendant No. 1 has not denied delivery of the cargo without production of the Bill of Lading. Even in the written statement, the defendants have admitted that the goods were released without production of the Bill of Lading. The three original Bills of Lading are all exhibited without any objection. The three original Bills of Lading received by the plaintiff from the Allahabad Bank have been exhibited by the plaintiff without any objection. The contents of the letters would show that the defendant No. 1 had contended that the goods released against a guarantee alleged to have been issued by the consignee. The defendants had also taken a stand that unless the plaintiff is able to demonstrate that the plaintiff has suffered any loss by reason of delivery being effected without the productio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugust, 1998 that the Singapore Office of the defendant No. 1 has received the said letter of the plaintiff and that unless the plaintiff substantiated any monetary loss in the transaction by production of relevant Banker's Certificates, the claim of the plaintiff on the defendant No. 1 would not be a valid one. The defendant No. 1 further informed the plaintiff that it would contact its agent at Dubai to find out the actual details of the case. The defendants in the written statement in Paragraph 26 has not specifically denied the statement made in Paragraph 15(a)(v). The defendant acknowledged the receipt of the said letter. The defendants contended that the defendant No. 1 in reply to the said letter informing that the Dubai Agent of the defendant No. 4 had issued the delivery orders on the basis of a guarantee given by the notified party which is well within the duties of the carrier. The defendants pointed out that the claim on account of delivery of the consignment without collection of the original Bill of Lading was made nearly eight months after the deemed delivery had taken place and in the claim letter, the plaintiff has not stated clearly about the non-receipt of pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on-payment of the bills which is almost eight months after the goods were dispatched as the common human experience would show that an unpaid vendor would not wait for so long when it had already received information about the delivery of the goods. The presumption, according to Mr. Saha, should be that the vendor has received payment from the seller and precisely for that did not enquire into the payment for almost eight months. It was in such conspectus, Mr. Saha has relied upon Sections 16 and 114(g) of the Evidence Act. 179. Before any adverse presumption can be drawn against a party, the Court has to arrive at a finding that the withholding of such evidence has been made purposely since the disclosure of such documents may jeopardize the claim of a party. The Court has also to see whether such documents are relevant and necessary for the trial and could have been the best evidence to decide the issue. If the documents are not relevant, withholding of such documents or non-production of such documents would not make any difference. 180. In Tomaso Bruno (supra) relied upon by the defendants relates to an unnatural death of the victim leading to the conviction of the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plete delivery and possession has not been given to some person having the right to such delivery and possession. The said decisions are not applicable in the instant case as the plaintiff at the trial able to establish that the defendant No. 1 is equally responsible for delivery of the goods to the consignee against the production of the original Bill of Lading and thereby has caused loss and damage to the plaintiff. The suit is not for recovery of price of goods sold and delivered. Bill of Lading is a document of title. The Bill of Lading has been returned to the plaintiff and the plaintiff is now in possession of the same. The goods have not been returned to the plaintiff. The bills were the security for payment. The documents were handed over to the defendants on the basis that until acceptance of the documents which is possible only after payment is made they were to retain their character as security for moneys to be paid by the overseas consignee. 184. 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 statin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the true owners of goods is a conversion. To constitute this tort there must be some act of the defendant repudiating the owner's right, or some exercise of dominion inconsistent with the right, the tort is committed where the defendant wrongfully asserts ownership or control of the goods in a manner inconsistent with the ownership or right of control of the plaintiff. Anyone who under of contract of sale hands over property in a manner adverse to the right of the person really entitled is guilty of conversion. 187. Conversion sometimes referred to as trover essentially means unauthorized dealing with the claims chattel so as to question or deny his title to it. Conversion can be of various kinds, the judicial authorities are unanimous that it is not possible to categorize exhaustively all modes of conversion. L.J. Bramwell in Hiort v. L NWR (1879) 4 Ex. D.188 at 194 has confessed when he said: I have frequently stated that I never did understand with precision what was a conversion . Lord Nicholls in Kuwait Airways Corp v. Iraqi Airways Co (Nos. 4 5) [2002] UKHL 19; [2002] 2 A.C. 883 at [39] echoed the same feeling when said: Conversion of goods can occur in so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In order to succeed in conversion the plaintiff must be able to show an entitlement to possession or delivery of the goods as at the time of conversion. 191. A misdelivery by bailee may also amount to conversion. It is a duty of a bailee, such as a carrier or warehouseman, to deliver the goods with which he is entrusted to or to the order of his bailor. To deliver them to anyone else is prima facie a conversion. (See Paragraph 17-19 of Clerk Lindsell on Torts, 21st Edition) 192. The plaintiff is entitled to make alternative pleadings in the plaint. The person may rely upon one set of facts, if he can succeed in proving them, and he may rely upon another set of facts if he can succeed in proving them: and it appears to me to be far too strict a construction of this Order to say that he must make up his mind on which particular line he will put his case, when perhaps he is very much in the dark. as observed in Re Morgan, Owen v. Morgan (1887) 35 Ch D 492 and Dhanpal Chettiar Ors. v. Govindaraja Chetty Ors, reported at AIR 1961 Mad 262. It has been the consistent views of all courts that the court cannot go beyond the pleadings of the parties. The parties are require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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. 196. 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. Mr. Banerjee has relied upon in Far Eastern Steamship (supra) in which the immunity contained in Clause 3 of Paragraph 6 of Article 3 of the schedule to the act was considered. A similar objection raised in the said proceeding was negatived by the learned Judges and the ratio of the decisions could be found in paragraphs 12, 15 and 16 which reads: 12. Thus the immunity contained in C. 3 of Para. 6 of Article 3 of the Sch. to the Act could be claimed by the carrier if two conditions ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find it difficult to draw any reasonable distinction between the words absolved from liability and discharged from liability and think that these words discharged from liability were intended to mean and do mean that the liability has totally disappeared and not only that the remedy as regards the liability has disappeared. This decision was again referred to and applied in American Export Isbrandtsen Lines Inc. v. Joe Lopez, AIR 1972 SC 1045. But I am unable to understand how these decisions are of any relevance to the facts of this case. As already noticed, the provisions of the Act are not applicable to the contract in this case. . 197. Moreover the claim against the defendant No. 1 is on account of conversion for which the period of limitation of three years and admittedly in the instant case the suit was filed within the period of three years from the date of shipment or alleged wrongful delivery whichever is later. The argument of Mr. Saha that the defendant No. 1 is an agent of the foreign disclosed principle, defendant No. 4, is also untenable as the plaintiff is able to establish that the defendant Nos. 1 and 4 have been jointly and severally undertaken to fulf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been the intention of the parties, to be deduced from the nature and terms of the particular contract and surrounding circumstances. The word as agent appearing against the name of the defendant No. 1 in the Bill of Lading would absolve such agent of liability unless it is proved that the agent has taken upon himself the liability. An agent may undertake joint liability on the main contract with the principle. Mr. Saha was quite emphatic to remind this Court that oral evidence is not admissible for the purpose of foisting a liability upon the defendant No. 1 who had signed the Bill of Lading as an agent of defendant No. 4. 200. 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. 201. The plaintiff has led evidence to show that the defendant No. 1 has clearly represented that it would be the obligation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed by the American Professor I. Maurice Wormse in his article Piercing the veil of Corporate Entity'. These views have been approved in a fairly recent decision of the Apex Court in State of Karnataka v. Jayalalitha reported at 2017(6) SCC 263. 203. 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. The defendant No. 1 is holding 100% shares in the defendant No. 4 and it can be safely concluded that the said defendants are in the same business and their joint liabilities cannot be denied. 204. The chain of events following the contract has shown that although the defendant No. 4 appears to be the carrier but for all intents and purposes the defendant No. 1 also has assumed the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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