9911796707
TMI Blog2018 (4) TMI 1954X X X X Extracts X X X X X X X X Extracts X X X X ..... of action of the suit arose in September, 1998 upon the plaintiff coming to know of the breach of contractual obligations 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30312/DXB to the plaintiff. 11. On enquiry, the plaintiff found that the defendants without the knowledge, authority and consent 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 ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4 with a copy to the defendant No. 1 requested the said defendant to furnish proof of the date or time of receipt of the original Bill of Lading with 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsion, fraud and misrepresentation. It is stated that in issuing the said Bill of Lading, the defendant No. 1 and/or the defendants and each of them represented and/or 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 paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y draw back from the Government of India to the extent of Rs. 1,28,768/- by cheque No. 131669 dated 1st May, 1998. Under such circumstance, there is no cause of action for filing the 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 weighin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the empty containers on March 11, 1998. The tele fax along with the reply was handed over to the clearing and custom House agents of the plaintiffs, namely, Lesslie & Lesslie at Kochi who, it appears 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 limitat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gencies, Salem reported in (1989) 2 SCC 163; (ii) Modi Entertainment Network v. W.S.G. Cricket PTE Ltd. reported in (2003) 4 SCC 341; (iii) Swastik gases Pvt. Ltd. v. Indian Oil Corporation Ltd. reported in (2013) 9 SCC 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 n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en delivered. 46. The said Clauses read:- "Clause "f" - Notice of loss or damage:- The carrier shall be deemed prima facie to have delivered the goods as described in this bill of lading unless notice of loss or damage to the goods indicating the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since both the consignments have reached on February 2, 1998 and as such ought to have been taken delivery on the said date, the period of limitation for the instant suit commenced on February 2, 1998 or at least on March 7, 1998 when the consignment 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 repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 69 (paragraph 13); (c) Union of India v. Ibrahim Uddin & Anr. : (2012)8 SCC 148 (at paragraphs 12, 24 and 25). 55. Mr. Saha has submitted that in paragraph 9(a) of the plaint the plaintiff has alleged breach of contract. The plaintiff has also pleaded 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, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s transactions with DXB Knits, Dubai for the years 1998-1999, 1999-2000 and 2000- 2001, Passport of Mr. Chandra Prakash Poddar, Duty Drawback Register maintained by the plaintiff, Guarantee Remittance Forms, Party Ledgers of export customers including DXB Knits, Plaint filed or the judgment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 102 of the Indian Evidence Act, 1872. Moreover, the plaintiff is under an obligation to lead evidence to prove its claim. In view of failure to adduce the best possible evidence in support of a positive assertion made by the plaintiff, Mr. Saha submits that an adverse inference shall be drawn 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised doubts about the authenticity of the documents produced forming Exhibit-'O'. It is submitted that in the affidavit of documents, the plaintiff has disclosed only one of the original Bills of Lading. In the plaint also a copy of only one of the original Bills of Lading was annexed. However, Exhibit - '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 l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of limitation in either the bill of lading or in the Carriage of Goods by Sea Act is unfounded. It is first submitted that in view of the plaintiff's own case that DXB Knits and in the Middle East Bank wrongfully refused to accept the documents and to make payment in respect of the goods, there can be no question 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 def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y-owned subsidiary of the defendant No. 1 and that the defendant Nos. 2 and 3 were interested in both the defendant No. 1 and the defendant No. 4. In view of the fact that the plaintiff clearly knew the connection between the defendant No. 1 and the defendant No. 4 at the time of making the shipment, and as even with such knowledge it entered 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elationship between the defendant No. 1 and the defendant No. 4, as is, inter alia, evident from the very names of the said two defendants, there could be no question of any suppression of such fact, or of the corporate veil being lifted or pierced to uncover the same. This is only a bogey raised by the plaintiff in an attempt to deflect the main issue. It is thus submitted 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' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Court. 88. Thus, it cannot be said that this Hon'ble Court has no jurisdiction to try, determine and adjudicate the instant suit. 89. On the question of limitation, Mr. Banerjee has submitted that the Bill of Lading being No. COK/30312/DXB was issued by defendant No. 1 on 15th January, 1998. The defendant was required to transport the goods from the port of 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 plaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, by usual legal proceedings is void to that extent. 97. The instant suit has been filed well within the period of limitation of three years from the cause of action. Thus, it cannot be said that the instant suit claiming a money decree is barred by the laws of limitation. 98. Mr. Banerjee has referred to Paragraphs 23 and 24 of the Plaint and submits that the plaintiff in the said paragraphs had clearly 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the said letter specially says that the goods were delivered by the representative of the defendant No. 1 at Dubai without any instruction from the plaintiff. A fax message dated 22nd August, 1998 is also attached to the said letter. The said fax message was issued by the Dubai agent of defendant No. 4 addressed to the defendant No. 1 which says about the illegal action on the part of defendant No. 1 to part with possession 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defendant No. 4 from the official website viz. Accounting and Corporate Regulatory Authority, (ACRA), Government of Singapore. It is evident from the Exhibit Y being the information available from the website of Government of Singapore that the status of defendant No. 4 is shown as "struck off". The date of such "struck off" was 5th July, 2007. From Exhibit Y it is also evident that the defendant Nos. 2 and 3 were the directors of defendant 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant No. 1, 2 and 3 is sham and malafide. The fact that defendant No. 4 does not exist, since the year 2007 was never brought to the notice of the Hon'ble Court by defendant No. 1. 112. There will be a failure of justice if the defendant Nos. 1, 2 and 3 are able to escape their liability in a clear case of conversion of the goods entrusted to defendant Nos. 1, 2 and 3. The plaintiff will be left remediless as defendant No. 4 cannot be sued, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed party without the original Bill of Lading. 117. Mr. Banerjee has referred to two English decisions MOTIS EXPORTS LTD. V. DAMPSKIBSSELSKABET AF 1912 reported at 1999 (1) LLR 837 and THE STONE GEMINI reported at 1999 (2) LLR 255 and submits that in both the decisions it has been held that delivery without Bill of Lading is to be treated as case of conversion. 118. Mr. Banerjee submits that conversion has been defined in CONSOLIDATED COMPANY V. CURTIS & 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. 29 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actions between the parties were commercial and not gratuitous. The plaintiff has not received payment of the goods covered under bill of Lading being No. COK/30312/DXB. The plaintiff has suffered loss and damages and is entitled to compensation from the defendant in view of the defendants acting in breach of contractual obligation and/or guilty of tort of negligence in respect of plaintiff's cargo in question and/or the documents of title relating thereto by handing over the cargo 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 su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 3. Defendant No. 4 was the wholly owned subsidiary of defendant No. 1. This fact has been proved in evidence and there is no credible cross examination on this issue at all. The defendant has not led any evidence at all. 128. Mr. Banerjee has referred to a decision of the Hon'ble Supreme Court in Linc International v. Mandiya National Paper reported : AIR 2005 SC 1417 (Para-8) where the Hon'ble Supreme Court has held that agent would be personally liable for facilitating fraud in 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 de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erally for delivering the consignment without production of the Bill of Lading. The letter dated 8th September, 1998 refers to a letter dated 22nd September, 1998 received from the defendant No. 1 in which the defendant No. 1 has taken a plea that unless the plaintiff is able to substantiate its claim with Banker's Certificate relating to non-payment in original, the defendant No. 1 would not admit the claim of the plaintiff. The plaintiff in its letter dated 13th October, 1998 had referred to a letter and telephonic 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also identified his signature. Similarly, the said witness has also referred to the letter dated 17th August, 1998 sent to the defendant No. 4 with a copy marked each to the defendant No. 1 and Loyal Freight. The plaintiff has produced a photocopy of the letter dated 24th August, 1998 issued by the Allahabad Bank certifying that the Allahabad Bank had not received payment. The plaintiff has also disclosed a letter written by Allahabad Bank on 13th October, 1998 stating that the Middle East Bank, Dubai has returned all 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defendant No. 1. He has produced the 12th Annual Directors' Report of defendant No. 1 with audited accounts for the year ended on 31st March, 1998. The witness has tendered the company report of the defendant No. 4 being documents issued by ACRA and the Annual Director's Report and balance sheets of the defendant No. 1 as on 31st March, 2004 along with receipt dated 17th June, 2007 and other documents forming part thereof. 140. The witness has stated that according to the last available audited balance sheets 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 Industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitation. 145. The objection to the jurisdiction of this Court is on the basis of the jurisdiction and law clause in the Bills of Lading which reads:- "Jurisdiction and Law Clause: The contract evidenced by or contained in this bill of lading is governed by the law of Singapore and any claim or disputes arising hereunder or in connection herewith shall be determined by the Courts is Singapore and no other Courts. All business is transacted only in accordance with the Singapore Freight Forwarder's Association Standard Trading 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 ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e defendants. He has categorically stated in the affidavit that he has been duly authorized by the defendant Nos. 2 to 4 to make and affirm the written statement on behalf of the defendants and he would crave leave to produce the original documents mentioned in the written statement at the time of hearing of the suit. The affidavit of documents was affirmed by one Mr. Tarak Datta on 26th April, 2011. He claimed himself to be the Executive of the defendant No. 1 and authorized by the defendant Nos. 2 and 3 to affirm the said affidavit. It is now 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 La ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings and evidence. 153. The right of a party to cross-examine in such circumstances has been considered in Debendra Nath Dutt v. Sm. Satyabala Dasi & Ors. reported at : AIR 1950 Cal 217. 154. In Debendra Nath Dutt (supra) a Division Bench of our Court was considering the right of a party who has not entered appearance in the suit to cross-examine the plaintiff during the hearing of the undefended suit. Their Lordships observed:- "Chapter 8 Rule 6 of our Rules provides that if such appearance is not entered "the suit is liable to be heard 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon not as a part of its own strategy of defence but rather as a requirement without which the plaintiff's evidence cannot be acted upon. Looked at from this point of view it should be possible to take the view that, though the defence of the tenant has been struck out, there is nothing in law to preclude him from demonstrating to the court that the plaintiff's witnesses are not speaking the truth or that the evidence put forward by the plaintiff is not sufficient to fulfil the terms of the statute. To us it appears that the basic principle 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 pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... just enough evidence to establish a prima facie case. Therefore, the court should ensure that by permitting the defendant at a later stage either to cross-examine the witnesses or to participate in the proceeding the plaintiff is not taken by surprise or gravely prejudiced. This difficulty however can be easily overcome in practice, because there is a wide discretion with the court and it is always open to the court, where it believes that the plaintiff has been misled, to exercise its discretion to shut out cross-examination or to regulate it in such manner 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 place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e inconstant and fluctuating. Thus, the presumption of death arises whenever seven years' unexplained absence is proved; but when it is necessary to establish the time of death more precisely the question must be decided on the evidence adduced in each specific case. (3) Presumptions of law are drawn by the court, and in the absence of opposing evidence are conclusive for the party in whose favour they operate; presumptions of fact are drawn by the jury, who may disregard them, however cogent. In practice, however, these distinctions are by no means easy to apply; and the 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 evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by one party or the other or the presumption of fact or law raised in favour of one or the other. (K.S. Nanji & Co. v. Jatashankar Dossa, AIR 1961 SC 1474, 1478: (1962) 1 SCR 492) 165. There is an essential distinction between burden of proof and onus of proof. Burden of proof lies upon the person who has to prove a fact and it never shifts, but the onus of proof shifts. Such a shifting of onus is a continuous process in the evaluation of evidence. (A. Raghavamma v. A. Chenchamma, AIR 1964 SC 136: (1964) 2 SCR 933). 166. The suit will fail if both the parties do not adduce any 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 pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istinction exists between a burden of proof and proof. The right to begin follows onus probandi. It assumes importance in the early stage of a case. The question of onus of proof has greater force, where the question is, which party is to begin. Burden of proof is used in three ways: (i) to indicate the duty of bringing forward evidence in support of a proposition at the beginning or later; (ii) to make that of establishing a proposition as against all counter-evidence; and (iii) an indiscriminate use in which it may mean either or both of the others. (Anil Rishi v. Gurbaksh Singh, (2006) 5 SCC 558: 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 defend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raw any adverse inference for non-production of such documents. 175. The defendants have made two positive assertions in the written statement. Firstly, that the goods have been delivered to the consignee with the consent of the plaintiff and the plaintiff, in fact, has taken the benefit of the duty drawback on the basis of such overseas export. The second assertion is that the defendant No. 4 is a foreign disclosed principal and, accordingly, the defendant No. 1 has no obligation to discharge other than an agent in view of Section 230 of the Indian Contract Act. The first assertion the defendant has to prove 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 rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is assumed that the defendant No. 1 could not be sued by reason of Section 230(3) of the Indian Contract Act, Section 233 of the Indian Contract Act comes to the aid of the plaintiff in establishing its right against the defendant No. 1 independently for the breach of contract. Moreover, the defendant No. 4 is no more in existence as is evident from the documents disclosed in this proceeding. The defendant No. 4 is defunct. 177. The plaintiff in Paragraph 15(a)(v) has asserted that the defendant No. 1 in reply to the letter of the plaintiff dated 17th August, 1998 informed the plaintiff by its letter dated 22nd August, 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( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods were delivered with the consent of the plaintiff and the plaintiff had claimed duty drawback but the defendants have failed to adduce any evidence in this regard. The onus to prove these positive assertions are on the defendants. 178. Mr. Saha has laid much emphasis on the aspect of non-production of the ledger accounts for the relevant years and the balance sheet of the plaintiff. Mr. Saha has argued that the said documents if produced, would show that the plaintiff has received payments in respect of the captioned bill. Mr. Saha was critical about the delay on the part of the plaintiff to enquire about the non-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 presumpt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e defendants, however, contended that the goods were released with the consent of the plaintiff. The onus shifts on the defendants to prove this fact. 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. 183. Commissioners for the Port of Calcutta (supra), Charles Barber (supra) and (1884) 10 APP Cas 74 are all cited for the proposition that the Bill of Lading remains in force so long as the complete 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction of the original Bills of Lading which is possible only if the consignee deposited the entire consideration amount with the Middle East Bank and thereby release the said documents from its banker so as to enable the consignee to present the original Bills of Lading to the defendants for release of the goods covered under the Bills of Lading. 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. 186. Any Act which is an interference with the dominion 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. Conversio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved paragraph 27: "27. Conversion has been described as an international exercise of control over goods which so seriously interferes with the right of another to control those goods that the person so acting may be required to pay its full value: see Fleming, The Law of Torts, 9th ed., 1998 at pp.60 ff. The test requires an intention to deal with the goods and to exercise dominion over them on behalf of someone other than the owner. It is not necessary that the person who converts the goods should be aware that there is interference with the rights of another. The emphasis is rather on an intentional act which has the effect of interfering with the rights of others. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e against the defendants for conversion. 194. The claim on account of damages in the instant case is assessed with reference to the duty cast upon the defendants. While the function of damages in contract is to compensate for expectation losses, damages in tort seek to protect the "reliance" or "status co-interest" i.e. to put the plaintiff in a position as if the tort have not occurred. [Livingstone v. Rawyards Coal Co. (1880) 5 App Cas 25 at 39 per Lord Blackburn (HL)] 195. 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. 196. It is no doubt a duty of the plaintiff to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection the international character of these rules, as has been already emphasised above, Rules of limitation are likely to vary from country to country. Provisions for extension of periods prescribed for limitation would similarly vary. We should be slow therefore to put on the words "discharged from liability" an interpretation which would produce results varying in different countries and thus keeping the position uncertain for both the shipper and the ship owner. Quite apart from this consideration however, we think that the ordinary grammatical sense of 'discharged from liability' does not connote "free the remedy as regard liability" but are more apt to mean a total extinction of the right. We 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 understan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a general rule an agent is not entitled to personally enforce nor is bound by contract entered into by him on behalf of his principle. This is, however, subject to any contract to the contrary. The said section illustrates three cases in which law shall presume a contract to the contrary namely, (a) where the contract is made by an agent for the sale or purchase of goods for merchant resident abroad, (b) where the agent does not disclose the name of the principal and (c) where the principal, though disclosed, cannot be sued. The question whether an agent apart from the cases mentioned above is to be taken to have contracted personally or merely on behalf of the principal, depends on what appears to have 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly used as a cloak for fraud as improper conduct (See Gover Modern Company Law, 4th Edition page 137), or when the notices of legal entity is used to defeat public convenience, justify wrong, protect fraud, to defend crime, the law will regard the corporation as an association of persons (see Company Law of Pennington 5th Edition, 1985 page 53), or when the concept is used to defraud creditors, to evade an existing obligation, to circumvent a statute, to achieve or perpetrate monopoly, or to protect knavery or crime, the Courts will draw aside the web of entity, will regard the corporate company as an association of live, up and doing, men and women shareholders, and will do justice between real persons as 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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