bsb IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J. O.O.C.J. O.O.C.J. NOTICE NOTICE NOTICE OF MOTION NO. 4008 OF 2008 OF MOTION NO. 4008 OF 2008 OF MOTION NO. 4008 OF 2008 IN IN IN SUIT SUIT SUIT NO. 1861 OF 1997 NO. 1861 OF 1997 NO. 1861 OF 1997 Dhanesh B. Jain ... Plaintiff v/s 1. M/s.ACE Lines Ltd. 2. All Cargo Container Lines Ltd. 3. All Cargo Movers (India) Pvt.Ltd. 4. M/s. Walford Meadows Ltd. ... Defendants And All Cargo Movers (India) P. Ltd. ... Applicant Mr.C.Balsara a/w Mr.Rajesh Talekar i/by K.Ashar & Co. for the plaintiff. Mr.Ashish Kamat a/w Mr.Rohan Kelkar & Ms.Preety Singh i/by M/s.A.Mehta Laljee & Co. for the Defendant No.3. CORAM: CORAM: CORAM: S.C.DHARMADHIKARI, J. S.C.DHARMADHIKARI, J. S.C.DHARMADHIKARI, J. DATED: DATED: DATED: 18TH FEBRUARY, 2009 18TH FEBRUARY, 2009 18TH FEBRUARY, 2009 P.C.: P.C.: P.C.: 1. This is a Notice of Motion by the defendant No.3 praying for rejection of the plaint by invoking the powers of this Court under Order VII Rule 11 of the Code of Civil Procedure, 1908. 2 2. It is urged in support of this Notice of Motion that, for the purposes of considering the request of the defendant No.3, the plaint allegation be taken as they are. Proceeding on the basis that what is stated in the plaint is true, at this stage, the Court must find out the real purpose of impleadment of defendant No.3. If the defendant No.3 has been impleaded only as an Agent of a disclosed principal, then by invoking Section 230 of the Indian Contract Act and relying upon the rulings of this Court, it must be held that the plaint does not disclose any cause of action as against Defendant No.3. 3. Mr.Kamat, learned counsel for defendant No.3 contended that, a perusal of the Bill of Lading based upon which the cause of action in the plaint proceeds would show that at the foot thereof the 3rd defendant has signed as an agent of the disclosed principal, namely, defendant No.2. In all these circumstances, the plaint cannot disclose any other cause of action as far as the defendant No.3. Mr.Kamat invited my attention to the averments in para 1 of the plaint and he also relied upon paragraphs 8, 14 and 15 of the same to urge that the plaint does not disclose any cause of action against defendant No.3. Hence, it is urged by Shri Kamath that the plaint allegations must be seen in the backdrop of 3 the factual position. So seen, clever drafting should not lead this Court into holding that a case is made out against defendant No.3. The cause of action, if any, is only on the basis of Agency and therefore the Motion be allowed. Mr.Kamath has relied upon the following decisions in support of the above contentions:- (1) (1) (1) I.T.C. Limited v/s Debts Recovery I.T.C. Limited v/s Debts Recovery I.T.C. Limited v/s Debts Recovery Appellate Appellate Appellate Tribunal & others, reported in (1998) Tribunal & others, reported in (1998) Tribunal & others, reported in (1998) 2 SCC 70; SCC 70; SCC 70; (2) (2) (2) Jaytee Exports v/s Natvar Parekh Industries Jaytee Exports v/s Natvar Parekh Industries Jaytee Exports v/s Natvar Parekh Industries Ltd., Ltd., Ltd., reported in A.I.R. 2001 Calcutta 150; reported in A.I.R. 2001 Calcutta 150; reported in A.I.R. 2001 Calcutta 150; (3) (3) (3) Samar Singh v/s Kedar Nath alias K.N.Singh Samar Singh v/s Kedar Nath alias K.N.Singh Samar Singh v/s Kedar Nath alias K.N.Singh & ors., reported in 1987 (Supp) SCC 663; ors., reported in 1987 (Supp) SCC 663; ors., reported in 1987 (Supp) SCC 663; (4) (4) (4) Saleem Bhai & ors. v/s State of Saleem Bhai & ors. v/s State of Saleem Bhai & ors. v/s State of Maharashtra Maharashtra Maharashtra & ors., reported in (2003) 1 SCC & ors., reported in (2003) 1 SCC & ors., reported in (2003) 1 SCC 557; 557; 557; (5) (5) (5) Sopan Sukhdeo Sable & ors. v/s Assistant Sopan Sukhdeo Sable & ors. v/s Assistant Sopan Sukhdeo Sable & ors. v/s Assistant Charity Charity Charity Commissioner & ors., reported in (2004) Commissioner & ors., reported in (2004) Commissioner & ors., reported in (2004) 3 SCC 137; SCC 137; SCC 137; (6) (6) (6) Midland Overseas v/s m.v. "CMBT Tana" & Midland Overseas v/s m.v. "CMBT Tana" & Midland Overseas v/s m.v. "CMBT Tana" & ors., ors., ors., reported in AIR 1999 Bombay 401; reported in AIR 1999 Bombay 401; reported in AIR 1999 Bombay 401; (7) (7) (7) Kohinoor Carpet Manufacturers v/s Forbes Kohinoor Carpet Manufacturers v/s Forbes Kohinoor Carpet Manufacturers v/s Forbes Gokak Gokak Gokak Ltd. & anr., reported in 2002 (4) Ltd. & anr., reported in 2002 (4) Ltd. & anr., reported in 2002 (4) Bom.C.R. Bom.C.R. Bom.C.R. 295. 295. 295. 4. On the other hand, it is urged by Shri Balsara, appearing for the plaintiff that the defendant No.3 is picking up some portion and sentences from the plaint that too from paragraph 1 and the other relied upon without reading them together and as a whole. In these circumstances, it is fallacious to contend that the 4 plaint proceeds on the basis that defendant No.3 is sued as an agent of the disclosed principal. For all these reasons, the motion be dismissed. 5. For properly appreciating the rival contentions, the plaint averments have to be seen. The plaintiff is a sole proprietor carrying on business in the name and style of Mahavir Apparels. The 1st defendant is a Company incorporated under foreign laws. The 2nd and 3rd defendants are also referred to in the cause title. It is stated in paragraph 1 of the plaint that the 3rd defendant has signed and issued the contract of carriage for carrying the goods belonging to the plaintiff. It is alleged that the 1st to 3rd defendants are inter-related/sister companies and/or belong to or managed by the same group. It is stated that the 4th defendant is an agent of defendant Nos.1 to 3. 6. Facts leading to the institution of the suit are set out in paragraph 2 by pointing out that the plaintiff entered into contracts with a Kenya based company for sale of 6 consignments of cotton knitted fabrics of the value set out in the said paragraph. 7. Paragraph 3 of the plaint proceeds on the basis that the plaintiff approached the 1st to 3rd defendants and 5 entrusted the said 6 consignments to them for carriage and delivery from the Port of Bombay to Mombassa. The 3rd defendant signed and issued 6 Bills of Lading. 8. Thereafter in paragraph 4, it is stated that the ships sailing from the Port of Bombay had arrived at Mombassa. The 3rd defendants addressed two fax messages to the 4th defendants specifically instructing them to deliver the said 6 consignments only against presentation of original Bills of Lading. 9. Thereafter, the plaintiff learnt that the delivery of the consignments was handed over without production of Bill of Exchange and, therefore, the matter was taken up with the 3rd defendant. In paragraph 5 of the plaint, it is specifically stated that the plaintiff requested the 3rd defendant to inform all concerned through their Mombassa Agent not to release the goods without production of the original Bills of Lading in respect of the consignment. 10. Firstly, it was informed by the 3rd defendant to the plaintiff that the 6 consignments are yet to reach Mombassa Port. They confirmed that delivery will not be effected without production of the original Bills of Lading. However, it is alleged that due to negligence 6 and by wrongful and illegal delivery of the cargo without production of the Bills of Lading, originals of which are with the plaintiff, the defendants have caused a breach of the contract. That is how the plaintiff has sustained losses and damages. The matter was taken up with the persons to whom the consignments were delivered. The losses are quantified, after the correspondence is referred, subsequently. It is alleged by the plaintiff that the defendants have committed a breach of their duties. They are also guilty of conversion of the gooding belonging to the plaintiff in connivance with the parties in which they were interested. It is in these circumstances that the suit is filed and an order and decree in terms of the prayers is claimed against defendant No.3. 11. As is well settled, it is not necessary to plead evidence. The plaint allegations will be substantiated on the basis of the documents relied upon by the plaintiff. At this stage, there is no necessity to rely on them in details or consider their evidentiary value. Suffice is to state that the plaint allegations do not indicate that this is a case where the plaintiffs are sueing the 3rd defendant as an Agent of the disclosed principal. There is substance in the contentions of Mr.Balsara that the plaint allegations must be seen as a 7 whole and that so seen and read this is a case where all the defendants are sued in their capacity as carriers of the consignment. In fact, the allegations proceed on the basis that the 3rd defendants are also principals. 12. It may be true, as contended and rightly, by Mr.Balsara that the defendants, and more particularly defendant No.3 can raise a plea that in effect the 3rd defendant stood as an Agent of a Disclosed Principal. That is how the case in their written statement proceeds. It may be that, after an opportunity is given to substantiate the pleas, that defendant No.3 may be absolved from the liability to pay the sums demanded. However, merely on the basis of some Endorsement on the bill of lading, at this stage, the plaint allegations cannot be displaced or brushed aside. 13. It is not as if I am unaware of the settled principles. Order VII of Rule 11 of the Code of Civil Procedure can be invoked by the 3rd defendant even at this stage. Merely because the written statement is filed is no bar to invoke this power. However, applicability of these principles would depend upon facts and circumstances of each case. 14. In the decision of I.T.C. Ltd. v/s Debt Recovery I.T.C. Ltd. v/s Debt Recovery I.T.C. Ltd. v/s Debt Recovery 8 Appellate Appellate Appellate Tribunal & ors., reported in (1998) 2 SCC 70, Tribunal & ors., reported in (1998) 2 SCC 70, Tribunal & ors., reported in (1998) 2 SCC 70, what the Supreme Court was considering was a request by the Appellant before it. Request was that the order of the Karnataka High Court, dismissing the writ petition by the Appellant, should be reversed. The appellant had approached the said High Court challenging the order of the D.R.T. and D.R.A.T. rejecting its application filed under Order VII Rule 11 of the Code of Civil Procedure. 15. The suit in question was filed by the Corporation Bank against the appellant before the Supreme Court who was the 5th defendant. The suit was filed against defendants 1 to 4 who belong to one family as well as the 5th defendant i.e. the appellant before the Supreme Court. The relief claimed was recovery of a sum of Rs.52,59,639.66 from defendants. The request of the appellant before the Supreme Court was that the plaint allegations proceed on the basis that at the request of the original defendants 1 to 4, the Corporation Bank has sanctioned Letter of Credit facility. The facility was sanctioned to secure the payment towards supply of cigarettes which were manufactured by the appellant before the Supreme Court. The facility was sanctioned and there were renewals from time to time. There were certain additional facilities. It was submitted that 9 the amounts, towards the facilities were appropriated by the original defendants 1 to 4, against the goods purportedly despatched by the appellant before the Supreme Court to their buyers. That is how the plaint proceeds and that has been referred to in para 7 of the Supreme Court decision. Once again the Supreme Court refers to para 14 of the plaint. After referring to the settled principles while deciding such an application, the Supreme Court then takes the plaint allegations as they are and holds that the word "fraud" being used in the plaint, does not in any manner indicate that the appellant before the Supreme Court had shipped the goods or that there was any other role of the said appellant in the transaction. The plaint allegations essentially project the mischief of the defendants 1 to 4 before the Supreme Court. Therefore, the Corporation Bank had a cause of action against them. On the basis of a general and vague allegation, the plaint does not disclose any cause of action against the 5th defendant, appellant before the Supreme Court. It is in that context the Supreme Court allowed the application of the appellant before it and set aside the order of the Karnataka High Court. 16. On facts, this decision is distinguishable because this is not a case where any apparent allegation has 10 been made. This is not a case where any hidden intent or purposes have to be noticed. This is a case where a cause of action is specifically set out against the third defendant. Whether the plaintiff succeeds in proving the allegations or not is something which is not relevant at this stage. Therefore, the decision relied upon is clearly distinguishable. 17. The other decisions need not be referred to as they proceed to reiterate identical principles. 18. The learned Single Judge’s view of this Court in the case of Midland Overseas v/s m.v. "CMBT Tana" & Midland Overseas v/s m.v. "CMBT Tana" & Midland Overseas v/s m.v. "CMBT Tana" & ors., ors., ors., reported in A.I.R. 1999 Bombay 401, reported in A.I.R. 1999 Bombay 401, reported in A.I.R. 1999 Bombay 401, once again must be seen in the background of the peculiar circumstances, where the third defendants, before this Court were impleaded only because they were shipping Agents for and on behalf of the 2nd defendants. Same is the case with the view taken by the learned Judge of the Calcutta High Court. 19. Once I am of the opinion that prima facie this is not a case of the plaintiff suing the 3rd defendant as an agent but as part and parcel of the parties entrusted with a consignment of the plaintiff for onward delivery and despatch and, therefore, holding them liable 11 alongside others, the relief claimed in the notice of motion cannot be granted. 20. Notice of motion fails and stands dismissed but without any costs. 21. It must be clarified that all the observations and findings are only for the purposes of deciding the present notice of motion and should not influence the Court while trying the suit. All pleas and defences of both sides are kept open. 22. Place the suit for framing issues on 5.3.2009. (S.C.DHARMADHIKARI, (S.C.DHARMADHIKARI, (S.C.DHARMADHIKARI, J.) J.) J.)