Case: Ttk Biomed Limited Vs. Arebee Star Maritime Agencies Private Limited & Others

Dr. S. Radhakrishnan, J.1. The above Appeals have been filed challenging the order of the learned Single Judge dated 23rd October, 2001, in the above Notices of Motion. The above Notices of Motion were taken out by Original Defendant Nos.5 and 6 seeking dismissal of the above suit, under Order VII, Rule 11 of the Code of Civil Procedure, 1908. 2. The Appellant is a Company incorporated under the provisions of the Companies Act, 1956 carrying on business inter alia of production of Rubber Condoms and Rubber Gloves. Defendant No.4, is the main line carriers of the container on which the consignment of the Appellant was carried. Defendant No.5 is a Company incorporated under the Companies Act, 1956 and is the Indian Agent of Defendant No.6. Defendant No.1 is a Public Limited Company incorporated under the provisions of the Companies Act, 1956, and is the Consignee to whom the Appellant had shipped the goods to. Defendant No.2 is a partnership firm. Defendant No.3 is a Company incorporated under the provisions of the Companies Act, 1956 and which was handed over the consignment of the goods by the Appellants for shipping the same to Moscow. Defendant No.6 Zim Izrael Navigation is the principal of whom Defendant No.5 is the Indian Agent. Defendant No.7 is a Nationalized Bank. 3. Mr. Madon, the learned Senior Counsel for the Appellant pointed out that Defendant No.1 had placed orders with Defendant No.2 for supply of goods vide Contract No.76-112/356-91 dated 25/07/1996. Thereafter Defendant No.1 through their bankers, Defendant No.7 established an irrevocable and transferable Letter of Credit, dated 10/06/1996, in favour of Defendant No.2. It appears that Defendant No.2 requested the Appellants, with the consent of Defendant No.1 to supply some goods that were part of the aforementioned contract dated 25/07/1996. Further, on 30/07/1996 at the request of Defendant No.4 and with consent of Defendant No.1, Defendant No.7 transferred a part of the irrevocable transferable Letter of Credit dated 10/06/1996, in favour of the Appellant for a sum of Rs.26,91,150/-. Hence, by virtue of the aforementioned contract and the transferred irrevocable transfer Letter of Credit dated 30/07/1996, the Appellant agreed to sell the goods to Defendant No.1. 4. Mr. Madon then pointed out that pursuant to completion of all formalities incumbent upon it, the Appellant handed over the consignment to Defendant No.3 on 09/10/1996 for carriage to Moscow and paid freight charges in advance of Rs.1,13,438/- and that Defendant No.3 issued a Bill of Lading dated 09/10/1996, the issuance of which had thereafter, by separate letters, had been confirmed and certified by Defendant No.3. Thereafter the Appellant by a letter dated 23/10/1996 informed Defendant No.1 that the desired delivery had been effectuated by Appellant handing over the consignment to Defendant No.3. 5. The learned Senior Counsel Mr. Madon for the Appellant has contended that on 30/10/1996, the Appellant had submitted the original documents for collection of the amount payable to it as per transferred Letter of Credit through their bankers to Defendant No.1s bankers namely Defendant No.7. Thereafter, the Appellants were informed by Defendant No.7 about certain alleged discrepancies in the documents submitted by the Appellant due to which the collection of the sum payable to Appellant could not be effectuated. Therefore the Appellant by a letter dated 06/11/1996 requested its bankers to urgently process the documents submitted by the Appellant and also issued a letter dated 13/03/1997 to Defendant No.1 informing Defendant No.1 that the necessary documents have already been forwarded through their bankers to Defendant No.7 and requested Defendant No.1 to advise Defendant No.7 to accept the documents and effect the Payment of Rs.26,91,150/- as per the transferred Letter of Credit. 6. Thereafter, the Appellant on 15/03/1997, sent the documents to Defendant No.7 but the same had been returned to the Appellants due to some alleged discrepancies, without effecting the payment. The Appellant also requested Defendant No.1, on several occasions, to allow the Appellant to obtain the reimbursement from Defendant No.1s Special Rupee Account, but to no avail. 7. Mr. Madon, further submits that despite the Appellants continual requests to Defendant No.3, on several occasions, to provide the delivery status and other delivery details of the consignment shipped under the said Bill of Lading dated 09/10/1996, Defendant No.3 failed to inform the Appellant of the whereabouts of the consignment. On 31/01/1998 Defendant No.3 intimated the Appellants, by issuing a letter bearing the aforesaid date, that they had written to Defendant No.5 to give an appropriate explanation regarding the position of the consignment and holding them responsible for the claims. 8. The learned Senior Counsel Mr. Madon for the Appellant states that Defendant No.3, by a letter dated 21/02/1998 addressed to Defendant No.1, a copy of which was sent to the Appellant, expressed their concern regarding the consignment as it was carried against Meridian Container Line Bill of Lading and that the Original Bill of Lading was returned to them with a clear endorsement that the consignment should be released only against the Bill of Lading issued and in the event of release of the said consignment without the presentation of the Original Bill of Lading or an acceptable bank guarantee, in lieu of the Bill of Lading, Defendant No.5 & 6 would be fully responsible for any claim of damages arising out of such action. 9. Mr. Madon then contended that notwithstanding the fact that all of the Respondents were fully aware that no consignment is to be released unless the consignee produces to the shipping agents the original copy of the Bill of Lading, however Defendant No.5,1,2 and 3 released the consignments to Defendant No.6 without producing any of the original documents. 10. Mr. Madon, the learned Senior Counsel for the Appellant pointed out that the goods were duly shipped to Defendant No.1, in view of which the Appellant has raised an invoice and Defendant No.1 has to clear the payment in respect thereto. Defendant No.1 has cleared the goods without making payment in respect thereof and is consequently bound and liable to pay the invoice amount together with interest. As to the alleged discrepancies in the documents submitted by the Appellant, Defendant No.1 having accepted the goods is deemed to have accepted the documents and the discrepancies, if any, are deemed to have been waived. Mr. Madon states that moreover, Defendant No.7 is bound and liable to pay the amount under Letter of Credit to the Appellant. It is also contended that the aforesaid Defendants have; i) wrongfully delivered the goods to Defendant No.1 causing damage to the Appellant being the invoice amount together with the interest and ii) have illegally and contrary to the Appellants permission or intimation, in breach of trust, and with an intention to defraud the Appellants, given the delivery of the consignment to Defendant No.1 without the necessary documents and Defendant No.1 received the same in breach of instructions. Mr. Madon pointed out that Respondent No.4 who transferred the Letter of Credit in favour of the Appellant is also bound and liable to pay amounts to the Appellant. Mr. Madon contends that inspite of the repeated reminders, the Respondents have failed to and neglected to remit the said amount of Rs.26,91,150/- payable to the Appellant vide transferred Letter of Credit. 11. Mr. Madon, the learned Senior Counsel for the Appellant strongly relied on the learned Single Judges judgment in Mahajan Silk Mills Pvt. Ltd. V/s. M.V.M.S.C. Elena (2000(3) Bom.C.R. 841), to contend that the Appellant be permitted to lead oral evidence to substantiate its case that the suit claim against Original Defendant No.6 is within time and that the issue should be decided at the final hearing of the suit. 12. Mr. Madon, the learned Senior Counsel contended that the learned Single Judge had erred in allowing the above Notice of Motion, whereby the Plaint is rejected against Defendant No.6, and he submitted that the said issue of limitation ought to have been decided at the trial, after allowing the parties to lead evidence. 13. Mr. Sancheti for original Defendant Nos.5 and 6 contended that the learned Single Judges order was fully justifiable, as the suit claim against the above Defendants is clearly barred by law of Limitation and that there is no cause of action against them. Mr. Sancheti pointed out that in the facts and circumstances of the case in Mahajan Silk Mills Pvt. Ltd., the learned Single Judge was of the view that the plea of suit being barred by law of limitation could be decided only by leading evidence as the same was not clear from plaint itself. 14. Mr. Sancheti, the learned Counsel for Respondent Nos.1 and 2 very categorically contended that the suit claim is ex-facie barred by law of limitation, as the same is very clear from the pleadings in the plaint. There is a clear failure on the part of the Plaintiff to file a suit within either 9 months or one year as per the provisions of Clause 23 of the Bill of Lading dated 09/10/1996, paragraph 6 of Article III of the Rules Relating to Bills of Lading, (Schedule to The Indian Carriage of Goods by Sea Act, 1925) respectively, results in the Plaintiffs remedy and rights being extinguished. Further, Mr. Sancheti strongly relied on the judgment of the Honble Supreme Court in the case of East and West Steamship Co. Vs. S.K. Ramalingam Chettiar, (AIR 1960 SC 1058 ), wherein the Honble Supreme Court held that paragraph 6 of Article III of the Indian Carriage of Goods by Sea Act, 1925 provides full immunity to carriers from all liability, if a suit is not instituted for recovery of the amount of loss that is caused within one year, and the suit is thereafter barred, and in fact the right to claim gets extinguished. The relevant part of the judgment reads as under: 18. It is worth noting in this connection that while paragraph 5 makes it clear that loss there means loss to the carrier and paragraph 8 speaks of loss or damage to or in connection with the goods, the Legislature has in the 6th paragraph of this Article left the words "loss or damage" unqualified. The object of the rule however being to give immunity to the carriers and the shippers from claims of compensation made by the owners of the goods in respect of loss sustained by them it will be unreasonable to read the words "loss" in that paragraph as restricted to only loss "of the goods". When the object of this particular paragraph and the setting of this paragraph in the Article after the previous paragraphs are considered there remains no doubt whatsoever that the learned Judges of the Bombay High Court were right in their conclusion that the loss or damage in this paragraph is a wide expression used by the Legislature to include any loss or damage caused to shipper or consignee in respect of which he makes a grievance and in respect of which he claims compensation from the shipping company. 19. The argument that loss due to failure to deliver the goods is not covered by this clause is merely to be mentioned to deserve rejection. The very use of the words "the date on which the goods should have been delivered" clearly contemplates a case where the goods have not been delivered. The clause gives the owner of the goods one years time to bring the suit the year to be calculated from the date of the delivery of the goods where the goods have been delivered and from the date when the goods should have been delivered where all or some of the goods have not been delivered........................................................... 15. Mr. Sancheti also strongly relied on clause 3 of paragraph 6 of Article III of the Schedule to the Indian Carriage of Goods by Sea Act, 1925, which reads as under: "In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered." 16. Mr. Sancheti, the learned Counsel for Defendant No.6 pointed out that as per the averments in the plaint, the wrongful delivery was effected by Defendant No.6 in March, 1997. Hence, the suit should have been instituted within one year from March, 1997 and as the present suit has been instituted in October, 1999, it would be clearly barred by law of Limitation. Mr. Sancheti contended that the right to sue itself got extinguished after a year. 17. Thereafter, Mr. Sancheti referred to and relied upon Saleem Bhai Vs. State of Maharashtra (2003) 1 SCC 557 ) to contend that the application under Order VII Rule 11 of the Code of Civil Procedure should be decided only on the basis of averments in the Plaint, and there is no need of written statement and the said application should not be postponed to the stage of trial. 18. After hearing both the learned Counsel, it is explicitly clear from the pleadings in the Plaint itself, that the suit is filed against Defendant No.6 much after the expiry of one year. There is absolutely no ambiguity and there is no evidence needed for establishing the same. 19. In the light of East & West Steampship Co. Case as held by the Honble Supreme Court, the Appellants right to sue itself gets extinguished after a lapse of one year after the delivery of the goods. 20. Saleem Bhais case also makes it clear that the application under Order VII Rule 11 of the Code of Civil Procedure should be decided on the basis of pleadings in the Plaint and need not wait till the trial.

Decision:
0[ds]18. After hearing both the learned Counsel, it is explicitly clear from the pleadings in the Plaint itself, that the suit is filed against Defendant No.6 much after the expiry of one year. There is absolutely no ambiguity and there is no evidence needed for establishing the same. 19. In the light of EastWest Steampship Co. Case as held by the Honble Supreme Court, the Appellants right to sue itself gets extinguished after a lapse of one year after the delivery of the goods. 20. Saleem Bhais case also makes it clear that the application under Order VII Rule 11 of the Code of Civil Procedure should be decided on the basis of pleadings in the Plaint and need not wait till the trial.