1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.3951 OF 2008 IN SUIT NO.437 OF 2004 WITH NOTICE OF MOTION NO.3952 OF 2008 IN SUIT NO.437 OF 2004 Alcobex Metals Ltd. A company duly registered under the (Indian) Companies Act, 1956, having its Registered Office at 4223/1, Ansari Road, Daryagang, New Delhi 110 002. ..... Plaintiff V/s. 1. Sai Shipping Company Pvt. Ltd. a Private Limited Company incorporated under the Companies Act, 1956, Embassy Center, Suite – 12-A, 11th Floor, 207, Backbay Reclamation, Nariman Point, Mumbai – 400 021. 2. Bhatia Shipping & Agencies Pvt. Ltd. A Private Limited Company, Incorporated Under the Companies Act, 1956, having its registered Office at Shipping House, 2nd Floor, Kumtha Street, Ballard Estate, Mumbai – 400 038. 3. Cargo-Levant Schiffahrtsges MbH, a foreign company, incorporated under the Laws of Germany and carrying on business at Altenwall 25, 28195 Bremen, Germany and also carrying on business in Mumbai through Sai Shipping & Agencies Pvt. 2 Ltd., having their office at Embassy Center, Suite 12-A, 11th Floor, 207, Backbay Reclamation, Nariman Point, Mumbai – 400 021. 4. Universe Insurance Agency Ltd. a foreign company, having its office at P.O. Box 586, Lamaca, Cyprus. 5. Cory Brothers Shipping Ltd. a foreign company, having its registered office at Powell Dyffryn House, 21, Berth, Tilbury Docks Essex RM18 7JT, United Kingdom. 6. First Corporate Shipping Ltd. trading as The Bristol Port Company having its registered office at 114-116, High Street, Gosforth, New- Castle Upon Tyne, NE3, 1HB United Kingdom. 7. Denholm Shipping Services Ltd. a foreign company, having its offices at 96, Langer Road, Felixstowe, Suffolk 1P11 BEA, United Kingdom. 8. Salem Tube International Ltd. having its registered office at 114-116, High Street, Gosforth, New Castle Upon Tyne, NE3 1HB, United Kingdom. ..... Defendants. Mr.Fereshte Sethna with Ispita Chatterjee i/by Dunmorr Sett, for the Plaintiff. Ms.A.M.Vernekar with Fouzia i/by Narichnia & Narichania, for defendant Nos.1 & 3. Mr.P.S.Pratap with Mr.H.G.Pratap, for defendant No.2. Mr.Prakash Shinde with Dhwani Mehta i/by J. Sagar Associates, for defendant No.6. 3 CORAM : SMT. ROSHAN S.DALVI, J. JUDGMENT RESERVED ON : 12 th DECEMBER, 2008. JUDGMENT PRONOUNCED ON : 07 th JANUARY, 2008. JUDGMENT : - 1. The defendant Nos.1 & 3 have taken out these notices of motion for rejection of plaint under Order VII Rule 11 of Code of Civil Procedure, on the ground that the suit is barred by law of limitation. 2. The prayers to the notice of motion relating to rejection of the plaint on the ground of lack of cause of action as well as on the ground of lack of inherent jurisdiction of the Court are not pressed. Consequently, the only ambit of the notice of motion is to see whether the suit appears from the statement in the plaint to be barred by the law of limitation under sub-clause (d) of Order VII Rule 11 of CPC. 3. The plaintiff carries on business of exporters of metals. Under the contract with defendant No.8, the plaintiff was to export certain goods. The defendant No.2 is a carrier of the goods, described as freight forwarder and/or Multimodal Transport Operator, in para No.2 of the plaint. 4. The defendants have produced certified copy of a Judgment being Folio No.334 of 2003 dated 20-10-2004 of the High Court of Justice Queen's Bench Division, Commercial Court, holding that the claim under the suit transaction against defendant No.2 herein is time barred. That 4 Judgment being a foreign judgment is conclusive as to the matters thereby directly adjudicated upon between the defendants herein and the plaintiff being the same parties, under whom they litigated under the same title. That suit was filed by defendant No.2 herein against the plaintiff, and defendant Nos.4, 5, 6 and 8 herein. The suit was for a declaration that the claim of the plaintiff herein against defendant No.2 herein was time barred. 5. It is the case of the plaintiff that the said judgment is hit by clauses (a) (c) and (e) of Section 13 of CPC and hence, the said judgment is not conclusive as to any matter contained therein between the parties herein. Section 13 runs thus : - “13. When foreign judgment not conclusive.- A foreign judgment shall be conclusive as to any matter thereby directly adjudicated upon between the same parties or between parties under whom they or any of them claim litigating under the same title except - (a) where it has not been pronounced by a Court of competent jurisdiction; (b) where it has not been given on the merits of the case; (c) where it appears on the face of the proceedings to be founded on an incorrect view of international law or a refusal to recognize the law of (India) in cases in which such law is applicable; (d) where the proceedings in which the judgment was obtained are opposed to natural justice; (e) where it has been obtained by fraud; (f) where it sustains a claim founded on a breach of any law in force in (India). 6. It will have to be seen whether the judgment considered the 5 question of jurisdiction, merits of the case, law in India and whether it has been obtained by fraud. 7. The judgment shows the background of the case, being a contract under which the parties litigated. It shows a contract entered into in February 2002 between the plaintiff herein and defendant No.8 herein, under two Multimodal Transport Documents (MTDs) dated 02-02-2002 under the Indian Multimodal Transportation of Goods Act 1993 (MTOGA). The contract between the parties being to deliver the goods in exchange of one of the three original MTDs has been shown. The clauses governing the contracting parties shown on the reverse of the MTDs have been cited and considered with regard to the liability for the loss or damage, limitation of action as well as jurisdiction of the Courts. The various parties being the agents of defendant No.2 herein, who was the disclosed principal in the contract and their function have been noted in the judgment. The error that took place in the execution of the contract upon discharge of the goods on 09-04-2002, upon a part played by defendant Nos.5, 6, 7 and 8 herein have been set out. 8. The time from which the cause of action arose under the suit contract has been considered after stating the precise date of discharge of goods being 09-04-2002 in Para No.5 of the judgment, thus : - “The precise date when the Fourth defendant released the 6 goods to the receivers is not clear, but since the fact of that release is confirmed by fax correspondence from the Fourth Defendant on 17 May 2002, the release had obviously taken place by that date”. 9. The case of the plaintiff herein as reflected from the papers and proceedings in that suit, being the case of mis-delivery and conversion of the goods, has also been set out in Para No.6 of the judgment. The plaintiff's various legal notices and reminders have been enumerated. 10. The conduct of the parties upon filing of that suit has been discussed in Paras No.7 to 10. The various proceedings enumerated are : - (a) The Claim Form issued on 04-04-2003 showing the prayers of defendant No.2 herein as a claimant (Plaintiff) in that suit. (b) The application to serve the proceedings on the plaintiff herein out of the jurisdiction of that court dated 25-07-2003; the territorial jurisdiction of the Court being considered as a place where the loss or damage under the contract occurred and the place of delivery of the goods, both of which were in England being within the jurisdiction of the British Court. (c) Order granting defendant No.2 leave to serve was passed on 29-07-2003. (d) The proceedings were served upon the plaintiff herein on 28-08-2003. (e) The plaintiff herein filed an acknowledgment of service (analogous to the “Vakalatnama/appearance” in Indian Courts) on 10-09- 2003. (f) Plaintiff failed to give address for service (analogous to the 7 “Memorandum of Plaintiff's Registered address” to be annexed to the plaint in Indian Courts). (g) The Commercial and Admiralty Court Registry issued a letter dated 17-09-2003 to the plaintiff herein contending that the acknowledgment of the service was defective and the plaintiff's defence can be struck off and the judgment of default can be entered if the acknowledgment was not corrected; it enclosed a defective acknowledgment of service for completion with a solicitor's address for service. (h) The plaintiff herein did not serve another acknowledgment of service with its solicitor's address for service within the jurisdiction of the British Court. (i) The plaintiff by its letter dated 07-10-2003, challenged the jurisdiction of the British Court without filing an acknowledgment of service complying with the rules. (j) The order directing the trial of the action on affidavit evidence came to be passed on 25-06-2004. (k) The hearing of the trial was fixed on 11-10-2004. 11. Upon setting out the proceedings in the Court, that transpired in the claim of defendant No.2 herein, the Judgment has noted certain criminal proceedings commenced by the plaintiff herein against defendant No.2 alleging criminal conspiracy and for which the Director of defendant No.2 came to be arrested and kept in custody from 23-09-2003 to 14-10-2003, in Para No.11 of the Judgment. 12. Thereafter, in Para No.12 of the judgment the Court has observed the lack of intention of the plaintiff herein of complying with the rules of that Court being Civil Procedure Rules (CPR), despite being 8 specifically informed in that behalf. The Court further proceeded to give its judgment on merits, since under the Indian Law, that judgment could be conclusive if it was given on merits and not by way of a judgment in default or a summary judgment, which could have been otherwise upon pronouncement for lack of the appearance of the plaintiff herein in that court to defend the claim of defendant No.2 herein, or on the ground that no evidence was otherwise required. 13. The Court has set out how the plaintiff herein despite being duly served and aware of the trial chose not to take any steps and instead commenced proceedings (filed the suit) in this Court, being this suit itself on 30-01-2004. In para No.15 of the judgment, the Court has set out the various affidavits and witness statements tendered by defendant No.2 herein, including the affidavit of Mr.Pratap, as an expert on Indian Law. 14. In Para No.16 to 18 of the Judgment, the territorial jurisdiction of the Court has been considered. The conditions of the suit contract under the MTDs showing the territorial jurisdiction of the Court were seen. Under Clause 12 of the contract, the loss and damage arising under the contract in the Court of appropriate jurisdiction came to be considered. Under that clause, the Court in the country where the loss or damage occurred was to be proper law of contract. It is therefore, held that since the goods were misdirected or delivered without proper 9 documentation in England, English law governed the contract. 15. Similarly, under Clause 23 of the Contract, the Court having territorial jurisdiction to be the place of delivery was seen. Hence, it was held that since the goods were delivered in England, the British Courts had territorial jurisdiction. 16. Thereafter, Para No.18 the judgment has considered that the British Court would be the proper and appropriate forum on three distinct grounds : (a) alleged misdelivery having occurred in England; (b) bulk of evidence would come from England; (c) Contract of carriage being governed by English Law, with further reference that the Indian Law is the same as English Law. 17. The Judgment thereafter, considered the main case of defendant No.2 on merits being that the claim under suit contract was time barred. This claim has been raised by defendant No.2 under Clause 22 of the contract, which is in terms of Section 24 of the MTOGA. The Court has considered that for whatever claim the plaintiff herein might make in respect of the mis-delivery, whether framed in contract or in tort, the said clause would apply in view of its wide terms. The Court has considered the date when the cause of action actually occurred, being the date when the goods should have been delivered, which would be sometime in April 2002 or the date when plaintiff herein would be entitled to treat the goods as lost, 10 which it has observed to have occurred at the very latest on 17 May 2002. The Judgment thereafter, observed the case of the plaintiff herein in the Indian proceedings (the present suit), where the plaintiff had admitted and asserted that the relevant misdelivery occurred in April-May 2002. The Court has accordingly observed that nine months period for bringing an action under Clause 22 of the Contract between the parties expired on 17- 02-2003 and hence, the right of the plaintiff herein to being an action upon such a contract could be extinguished against the claimant, defendant No.2 herein. The court had also considered the precedents followed by that Court in that regard. 18. Further in Para No.21 of the Judgment, the Court has considered that even if the MTOGA did not apply, under the Hague Rules, action would have still expired on 17-05-2003. {These are analogous to action under Indian Carriage of Goods Act, 1925 under which similar one year period of limitation is prescribed under Article III (6)}. 19. The Court thereafter, considered in Para No.22 that since the plaintiff herein had not filed any proceedings anywhere in the world before the last such date of limitation, its claim was time barred, at least in May 2003 and its right to bring any claim stood extinguished. The Court has further considered that the said conclusion would have been reached even under Indian Law (Section 24 of MTOGA) and Clause 22 of the 11 Contract between the parties. 20. In Para 24 of the judgment the Court has considered whether the claimant (defendant No.2 herein) was entitled to the negative declaration it sought. The Court held that had it jurisdiction to entertain it in its discretion if exercised with caution, if a useful purpose was served and it was otherwise appropriate. The Court reached the conclusion of exercising such discretion upon three principal reasons : - (1) The claim of the plaintiff herein was time barred and the plaintiff herein has no answer to that. (2) To preclude the plaintiff herein from continuing its claim in India. (3) It would not be necessary for defendant No.2 herein to pursue its claim against other defendants which were all contingent upon its liability to the plaintiff herein and if there is no such liability, all those claims will fall away. 21. The Court thereafter, concluded upon the aforesaid reasons that it was satisfied that the claimant (defendant No.2 herein) was entitled to the negative declaration it sought. It therefore, held that claimant (defendant No.2 herein) was under no liability to the plaintiff herein because the claim by the plaintiff herein was time barred. 22. The Court proceeded to grant costs to defendant No.2 herein in the final paragraph of the judgment upon the Statement of Costs 12 submitted by defendant No.2 and summarily assessed at 68000 Pound Sterling. 23. This Court is not sitting in appeal against that Judgment. This Court has co-ordinate jurisdiction. This Court is bound only to see the certified copy of a Judgment of a competent Court being passed with regard to the matter in issue between the same parties. Once that is shown, such foreign judgment becomes conclusive. The object of Section 13(b) is to prevent precisely what the plaintiff has called upon the Court to do; to go into the merits of the claim once they are decided by a Court of competent jurisdiction. Since it was argued on behalf of the plaintiff that the order produced by the defendants was not passed by the Court of competent jurisdiction, the British Court having no territorial jurisdiction to decide the claim and was an incorrect view taken by the Court without reference to Indian Law and was obtained by fraud, the Court went into the judgment as aforesaid to determine whether the plaintiff's assertion can hold water. 24. The averments of the plaintiff in the plaint, the documents annexed to the plaint and affidavit filed by the plaintiff's Managing Director in the proceedings in execution of the judgment in the U.S. District Court, Southern District of New York, need to be seen to consider the strength of the plaintiff's assertion. 13 25. The suit is for recovery of 308769 Pounds Sterling with interest as shown in the particulars of the plaint. (Exh.N to the plaint). 26. It is the case of the plaintiff that the plaintiff had contracted with defendant No.8 to sell certain goods as stated in Para 2 of the plaint. 27. The averments relating to the precise contract between the plaintiff and defendant No.8 have been set out in para No.3 of the plaint. These averments show that on 12-04-2001 the defendant No.1 placed a letter of intent with the plaintiff, followed by purchase orders bearing No.1787 and 1932 dated 24-04-2001 and 12-10-2001 for purchase of certain copper tubes. The contract set out the terms with regard to the delivery against payment through the retirement of documents as per usual international commercial practice. 28. The averments in para No.4 show that in pursuance of such agreement with defendant No.8, the plaintiff packed the contracted goods and delivered them under their invoice specified in the said para. 29. In February 2002, the defendant No.1 to 4 were entrusted with the consignment for carriage from Mumbai, India for delivery to defendant No.8 in the United Kingdom. The cargo was to be delivered at Avonmouth, United Kingdom, by sea and thereafter, by onward transportation at Stafford, West Midlands, United Kingdom. The plaintiff paid the required freight charges to defendant No.2. The defendant No.2 issued receipts in 14 relation to the plaintiff's cargo on 02-02-2002 titled “Multimodal Transport Document” (MTD). The defendant No.1 and 3 issued Bill of Lading to defendant No.2 in respect of the said transaction showing the particulars of the plaintiff's consignment. 30. The averments in Para No.6 of the plaint show the plaintiff's submission that the express and/or implied obligation and the arrangement between these parties was to ensure that the cargo remained in the possession of defendant Nos.1 to 7. Defendant No.8 was to take delivery of the goods under legal and valid documentation. 31. It is the plaintiff's case that these defendants could not hand over the cargo to defendant No.8, until defendant No.8 made full payment of the invoice and retired the title documentation. The plaintiff has further set out in the para 6 of the plaint that there was a variation agreed between plaintiff and defendant No.8, which entailed payment of 70% of the invoice amount on actual delivery and 30% within 60 days from the date of the Bill of Lading. 32. The averments in para No.7 of the plaint show that the payment terms were cash against delivery (CAD). It is the plaintiff's case in the said para that the cargo was delivered to defendant No.8 by defendant No.1 to 7 without insisting upon the production of the original title documentation, 15 i.e. Bills of Lading and/or MTD. It is the plaintiff's case that the defendants acted fraudulently and collusively in making wrongful delivery. The plaintiff has submitted in Para No.7 of the plaint that the said act constitutes dishonest misappropriation and/or conversion of the goods belonging to the plaintiff in violation of the law. The plaintiff has submitted that by virtue of the said wrongful delivery, they have suffered a loss of 96620 Pound Sterling initially, and thereafter, further loss by virtue of their cash flow being impelled. The plaintiff has claimed that the defendants are jointly and severally liable to compensate them for the said loss together with Commercial Interest thereon. 33. In para 8 of the plaint, the plaintiff averred that the defendant Nos.1 to 7 were required to comply with the customary international and maritime practices and norms and which they failed to do when they delivered the goods to defendant No.8 and are therefore, guilty as joint tortfeasors for the tort of negligence and conversion and as also fraud and breach of trust. The plaintiff has also claimed that the defendant No.2 is vicariously liable upon such tort upon the cargo being delivered without production of the Liner/Ocean Bill of Lading and/or MTD to defendant No.8, who had contracted with the plaintiff. 34. In para No.9 of the plaint, the plaintiff has relied upon admissions 16 of wrongful delivery, as also consequential liability incurred by defendant No.2 as reflected in the correspondence annexed to the plaint. This admission of wrongful delivery and liability is made by defendant No.2 in its correspondence with its insurers. It has been averred in the said para that the plaintiff in good faith continued to await due settlement, they having acted upon reliance of such assurance. 35. The plaintiff has stated about final notice sent by them to defendant No.1 to 7 on 27-02-2003 in Para No.10 of the plaint. 36. The plaintiff has averred about indemnity action filed by defendant No.2 against various parties responsible for the delivery of the goods to defendant No.8. The plaintiff has averred that in such action, the defendant No.2 has falsely raised a plea “ostensible time bar”, which was done only “ to dissuade the plaintiff from pursuing their claim against defendant No.2”. The plaintiff relied upon the claim form of defendant No.2 filed in Queen's Bench Division of Royal Courts of Justice, London, United Kingdom. The plaintiff also averred about the institution of proceedings against defendant No.3 in the Courts of Bremen, Germany. The plaintiff has shown valuation of their claim upon the legal liability of defendants jointly and severally to the plaintiff for the loss suffered by the plaintiff and the interest claimed by the plaintiff as damages for negligence and/or conversion arising out of the defendants acts, negligence and defaults. 17 37. The plaintiff claimed security for the said amount in para No.13 of the plaint by virtue of plaintiff's having a Maritime Claim and/or Statutory claim and/or Marytime Lien, which plaintiff was entitled to exercise. 38. In the clause relating to the territorial jurisdiction of the Court being para No.14 of the plaint, the plaintiff has set out that the Contract of Carriage evidenced by the MTD and the Bill of Lading was entered into at Mumbai. 39. In Para 15 of the plaint, being clause showing cause of action that arose in favour of the plaintiff, the plaintiff has averred that, that it arose in April-May 2002 when the tort of negligence and/or conversion was committed and when the defendants became aware of the same. The plaintiff has also averred that the cause of action is continuous and therefore, not barred by law of limitation. 40. A plaint is to be read as a whole to ascertain its true meaning and the cause of action contained in it. The plaintiff has admittedly sued the defendants upon the contract entered into by the plaintiff of carriage of goods by sea from Mumbai to Avonmouth and thereafter, by land to West Midlands, United Kingdom. The contract was CAD – cash against delivery. It is stated to be the usual Maritime International Contract. This is evidenced by the contracting documents being MTDs and the Bills of Lading. The statutory liability claimed by the plaintiff is under the specific 18 Statute with regard to the transportation of the goods by more than one mode of transport, being the Multimodal transportation of goods. Though, the plaintiff has not stated the name of the Statute, the plaintiff has claimed that the defendants have incurred interalia statutory liability. The