: 1 : IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION SUIT NO.2182 of 1992 SUIT NO.2182 of 1992 SUIT NO.2182 of 1992 Hindustan Tin Works Pvt. Ltd. a private limited company incorporated under the Companies Act of 1956 and having its registered office at 488, Bastam Market, Sadar Bazar, Delhi - 110 006 and also carrying on business at I.G.T. Road, Ghaziabad and also carrying on business at Hindustan Tin Works Pvt. Ltd. C/o. Bhavna Enterprises, 618, Tulsiani Chambers, 6th Floor, Nariman Point, Bombay - 400 021. .. Plaintiffs. Versus 1. Preservatrice Fonciere T.I.A.R.D. Compagnie d’ Assurances, a company organised and incorporated under the laws of France and carrying on business at C/o.Societe Faugere & : 2 : Jutheau S.A. and carrying on business at Branche Maritime Et Transports, Bureaux, 17, Rue de Surene 75008 Paris, 13 Rue de la Ville-Eveque B.P. 280-08-75360 Paris-Cedex and represented in India through their agents F.E. hardcastle & Co. Pvt. Ltd., 10 Bank Street Cross Lane, Bombay - 400 023. 2. Faugere & Jutheau S.A., a company organised and incorporated under the laws of France and carrying on business at Branche Maritime Et Transports, Bureaux, 17, Rue de Surene 75008 Paris (France) and also carrying on business at 13 Rue de la Ville 1, Eveque-B.P. 280-08-75360 Paris (France) - Cedex 08 and represented in India through their agents F.E. Hardcastle & Co. Pvt. Ltd., 10 Bank Street Cross Lane, Bombay - 400 023. : 3 : 3. F.E. Hardcastle & Co. Pvt. Ltd., a private limited company, existing under the Companies Act of 1956 and carrying on business at 10, Bank Street Cross Lane, Bombay - 400 023 .. Defendants. Mr.R.Narichania with Ms.Preeti Shah i/b.Motiwala & Co. for the plaintiffs. None for the defendants. CORAM : R.Y. GANOO, J. CORAM : R.Y. GANOO, J. CORAM : R.Y. GANOO, J. DATE : 6th October, 2008. DATE : 6th October, 2008. DATE : 6th October, 2008. JUDGEMENT :- JUDGEMENT :- JUDGEMENT :- 1. This suit is filed by the plaintiffs to recover from defendants Rs.9,13,852.50 alongwith interest @21% per annum on Rs.5,54,517.50 from the date of the filing of the suit till realisation and for costs. 2. Plaintiffs imported Brazilian Origin Prime Tin Plate M R type from M/s.Transfer S.A. weighing 325.325 MT. This cargo was divided into two consignment. First consignment was for 299.975 MT and the second consignment : 4 : was for 25.350 MT. The plaint indicates various details as to how the goods were put on the vessel "Ibn Qutaibah". The goods reached the Bombay Port on 2.12.1987 being the first consignment and the second consignment reached Bombay Port on 8.12.1987. The said goods were thereafter transported to Ghaziabad (State of Uttar Pradesh) and as the packets containing the goods came to be opened which were in the bonded condition, the plaintiffs realised that a part of the goods was in rusty condition. The said quantity of rusty goods were determined to the tune of 192.720 MT and that was termed as unfit for use and goods weighing 107.255 were found to be in a good condition for the use. 3. The plaintiffs have instituted this suit for recovery of damages as regards the goods which were found in the rusty condition weighing 192.720 MT. The plaintiffs have restricted their claim sofar as this suit is concerned upto the stage of reaching the goods at Bombay Port as the goods were insured with the Oriental Insurance Company for transport from Bombay to Ghaziabad (State of Uttar Pradesh). Hence the present suit is filed against defendant Nos.1 and 2 being the Insurance Companies, who had entered into an Agreement of insurance : 5 : with the plaintiffs in regard to the goods which came to be transported from Santos, Brazil to Bombay Port. Defendant No.3 is the agent of defendant Nos.1 and 2. 4. Upon noticing the fact that a part of the goods are found in the rusty condition, the plaintiffs appointed M/s.K.D.Kohli & Co. Pvt. Ltd. to conduct a survey and said M/s.K.D.Kohli & Co. Pvt. Ltd. submitted their survey report dated 9.1.1989. After carrying out detailed investigation, the said surveyor fixed the liability upon the defendant Nos.1 and 2 in regard to the goods weighing 192.720 at Rs.5,48,298/-. It is in these circumstances, the plaintiffs lodged their claim with defendant No.2 and demanded Rs.5,54,517.50 being the damages inclusive of Rs.6,220/- being surveyor’s charges. This was done by letter at Exhibit-P-13 Exhibit-P-13 Exhibit-P-13 being letter dated 9.3.1989. This claim was disputed by defendant No.2 by letter at Exhibit-P-14 Exhibit-P-14 Exhibit-P-14 being letter dated 18.4.1989 and that is how the plaintiffs instituted the present suit in this court on 7.4.1992. 5. No written statement came to be filed by defendant Nos.1 and 2. : 6 : 6. Defendant No.3 filed written statement. Defendant No.3 contended that the suit is bad for mis-joinder. They have also contended that the defendant No.3 had no authority to settle the claim and, therefore, the suit against them is not maintainable. It is also their contention that the suit was filed beyond the period of limitation. They have otherwise denied the allegations levelled against defendant No.3. Based on the pleadings, issues came to be framed on 16.6.2008. They are as under:- I S S U E S I S S U E S I S S U E S i) Whether the 1st and 3rd defendants prove that the plaintiffs have no cause of action and the suit is barred by limitation as contended by them in their written statement? .. In the .. In the .. In the negative. negative. negative. ii) Whether the 1st defendant proves that this Hon’ble Court has no jurisdiction to entertain this suit and the suit is bad for mis-joinder of cause of action as contended by them in their written statement? .. In the negative. .. In the negative. .. In the negative. iii) Whether the plaintiffs prove that the loss suffered by the plaintiffs fell within the scope and ambit of the insurance certificate / policy issued by the 1st and 2nd defendant? .. In the .. In the .. In the affirmative. affirmative. affirmative. iv) Whether the 1st defendant proves that the claim is not payable as the plaintiffs have failed to preserve the rights of recovery of the defendants as contended by them in their written statement? .. In the negative. .. In the negative. .. In the negative. : 7 : v) Whether the 3rd defendant proves that suit against them should be struck off for mis-joinder of parties as alleged by them in their written statement? .. In the negative. .. In the negative. .. In the negative. vi) Whether the plaintiffs are entitled to receive a sum of Rs.9,13,852.50? .. As per the .. As per the .. As per the operative part. operative part. operative part. vii) To what reliefs? .. As per the operative As per the operative As per the operative part. part. part. 7. Answer to each of the issue is mentioned against respective issue. 8. At trial, Mr.Gurmeet Singh, Deputy Manager (Accounts) gave evidence on behalf of the plaintiffs. Nobody appeared on behalf of the defendants. Hence, no cross-examination was conducted insofar as this witness is concerned. No other witness was examined on behalf of the plaintiffs. Defendants have not led any evidence. 9. I have heard learned Advocate Mr.Narichania for the plaintiffs. My attention was drawn by learned Advocate for the plaintiffs to the Notice at Exhibits-P-1 Exhibits-P-1 Exhibits-P-1 and P-3 and P-3 and P-3 and bills of lading at Exhibit-P-2 Exhibit-P-2 Exhibit-P-2 collectively. The fact that the goods landed at the Bombay Port is not disputed. Similarly, the fact that the plaintiffs had imported the goods has been made out in the evidence of Mr.Gurmeet Singh, P.W.No.1 The Port Trust Authorities had : 8 : issued remark list at Exhibits-P-4 to P-9 Exhibits-P-4 to P-9 Exhibits-P-4 to P-9 in regard to the bundles which came to be received at the Bombay Port and they show that some of the bundles were rusty. They also show that the number of strips were off insofar as certain bundles. The certificate of insurance at Exhibit-P-10 Exhibit-P-10 Exhibit-P-10 goes to indicate that defendant No.2 was the Insurance Company and defendant No.1 was the Co-Insurance Company. The said document also goes to show that if any claim should be lodged, it should be lodged with defendant No.2 and that is how the plaintiffs have lodged their demand at Exhibit-P-13 Exhibit-P-13 Exhibit-P-13 by letter dated 9.3.1989 with defendant No.2. A perusal of the surveyor’s report at Exhibit-P-11 Exhibit-P-11 Exhibit-P-11 collectively would go to show as to how the goods came to be transported to Bombay and to what extent the damage was suffered by the goods. My attention was drawn by learned Advocate for the plaintiffs to the conditions of insurance set out in the Certificate of Insurance at Exhibit-P-10 Exhibit-P-10 Exhibit-P-10 and had submitted that defendant Nos.1 and 2 in their capacity as the insurance company and defendant No.3 as the agent of defendant Nos.1 and 2 are liable on account of the goods being delivered in the damaged conditions, namely, the goods were found in rusty condition. My attention was drawn to internal page 9 of the surveyor’s report at Exhibit-P-11 Exhibit-P-11 Exhibit-P-11; where an exercise : 9 : is carried out so as to arrive at the quantum of damage in terms of money and that the same is shown as Rs.5,48,298/- which forms the basis of the present claim of the plaintiffs. The defendant No.2 have disputed the claim of the plaintiffs by letter at Exhibit-P-14 Exhibit-P-14 Exhibit-P-14 being letter dated 18.4.1989. I have also found on record report issued by M/s.F.E. Hardcastle & Co. Pvt. Ltd., who are shown as Marine Surveyors and in the said report, it is sought to be suggested that the moisture on the goods found due to packing in humid conditions at the country of origin with resultant condensate prolonged period of consignment in this state has caused rusting staining of the tin sheets. 10. After having considered the aforesaid documents on record, I am inclined to observe that defendant Nos.1 and 2 were liable for the damage caused to the goods, keeping in view the terms of the policy which are reflected in the certificate of insurance at Exhibit-P-10 Exhibit-P-10 Exhibit-P-10. The surveyor’s report issued by M/s.K.D.Kohli & Co. Pvt. Ltd. or M/s.F.E. Hardcastle & Co. Pvt. Ltd., do go to show that a part of the consignment was found to be in a rusty condition. If it was the stand of the defendants that the goods were not properly packed and that resulted in : 10 : causing damage to the goods, the burden was on the defendants to show that the goods were not properly packed. The defendants have not discharged the said burden. The report of M/s.K.D.Kohli & Co. Pvt. Ltd. goes to show that there was negligence on the part of the transporters and it goes to show that the goods came into contact with the sea water. Between the 2 reports, namely, report issued by M/s.K.D.Kohli & Co. Pvt. Ltd. at Exhibit-P-11 Exhibit-P-11 Exhibit-P-11 and by M/s.F.E. Hardcastle & Co. Pvt. Ltd. at Exhibit-P-12 Exhibit-P-12 Exhibit-P-12, the findings given by M/s.K.D.Kohli & Co. Pvt. Ltd. appears to be probable and in any case, the plaintiffs have proved the said report. Defendants have not stepped into the witness box and have not discharged the burden cast on them and have not shown that the goods were not improperly packed which resulted in causing damage to the goods. 11. With the aforesaid observations, I now proceed to deal with the issues. Issue No.1 :- Issue No.1 :- Issue No.1 :- ============= ============= ============= 12. The defendants have contended that there is no cause of action to the plaintiffs and the suit is barred by the period of limitation. The plaintiffs have made out : 11 : a case in their favour about the negligence on the part of the transporters and the consequent liability of the insurance company. A claim put up by the plaintiffs vide letter dated 9.3.1989 at Exhibit-P-13 Exhibit-P-13 Exhibit-P-13 was disputed by defendant No.2 by letter dated 18.4.1989 at Exhibit-P-14. Exhibit-P-14. Exhibit-P-14. The present suit is filed on 7.4.1992. Considering the facts and circumstances, Article 44(b) of the Indian Limitation Act would be applicable and considering the fact that the claim was denied by the defendants by their letter dated 18.4.1989, institution of the suit on 7.4.1992 within three years will have to be treated as the one filed within the period of limitation. . In view of the above, Issue No.1 is answered in the negative. Issue No.2 :- Issue No.2 :- Issue No.2 :- ============= ============= ============= 13. Sofar as this aspect is concerned, the plaintiffs have been granted leave as per Clause 12 of the Letters Patent and, therefore, this court shall have jurisdiction to try and entertain the suit. The defendants claim that the suit is bad for mis-joinder, except stating this, nothing has been clarified and no evidence is placed before the court to show as to how the suit is bad for : 12 : mis-joinder. . In view of this, Issue No.2 will have to be answered in the negative and accordingly, it is answered in the negative. Issue No.3 :- Issue No.3 :- Issue No.3 :- ============= ============= ============= 14. Evidence of Mr.Gurmeet Singh, P.W.No.1 has gone unchallenged. He has given detailed evidence as to how the goods were purchased, how the insurance policy was purchased and as to how the consignment reached Ghaziabad in damaged condition. The surveyor’s report at Exhibit-P-11 Exhibit-P-11 Exhibit-P-11 goes to show the circumstances under which the goods came to be damaged and the extent of the damage. Evidence of Mr.Gurmeet Singh, P.W.No.1 coupled with the documents placed on record and, in particular, the terms and conditions of the policy which are reflected on the face of documents at Exhibit-P-10 Exhibit-P-10 Exhibit-P-10 would clearly go to show that the defendant Nos.1 and 2 were liable to compensate the plaintiffs for the loss suffered by them. The plaintiffs have proved that they have suffered loss. The plaintiffs have proved the existence of the insurance policy issued by defendant Nos.1 and 2. Hence, Issue No.3 is answered in the affirmative. : 13 : Issue No.4 :- Issue No.4 :- Issue No.4 :- ============= ============= ============= 15. Defendant No.1 have not shown as to how plaintiffs have failed to preserve the rights of recovery of the defendants and no evidence is placed before the court in that behalf. Hence the Issue No.4 is answered in the negative. Issue No.5 :- Issue No.5 :- Issue No.5 :- ============= ============= ============= 16. Defendant No.3 have contended that the suit is bad for mis-joinder. However, this contention is not made out by defendant No.3 before the court and, therefore, Issue No.5 is answered in the negative. Issue No.6 :- Issue No.6 :- Issue No.6 :- ============= ============= ============= 17. The Survey report at Exhibit-P-11 Exhibit-P-11 Exhibit-P-11 goes to indicate the extent of damage in terms of money and the plaintiffs have claimed Rs.5,48,298/- qua the defendant Nos.1 and 2. I have also accepted the stand of the plaintiffs that the goods were duly insured by defendant Nos.1 and 2 and, therefore, defendant Nos.1 and 2 are liable to compensate the plaintiffs for the loss suffered by the plaintiffs. The plaintiffs have also claimed surveyor’s charges to the : 14 : tune of Rs.6,220/- and that they are entitled to recover the same from defendant Nos.1 and 2. To that extent, the claim of the plaintiffs is required to be accepted. The plaintiffs have claimed the charges from defendant No.3, who are shown to be the agents of defendant Nos.1 and 2. Since the plaintiffs themselves have admitted in the plaint that the defendant No.3 is the agent of defendant Nos.1 and 2, if defendant Nos.1 and 2 are being sued in their respective capacities as the insurance company, it is difficult to understand as to how the agent of insurance company (principal) can be made liable and no satisfactory explanation is found in the pleadings as to how defendant No.3 is made liable to pay. In my view, no decree can be passed against defendant No.3 as they are the agents of defendant Nos.1 and 2. To that extent, the plaintiffs cannot press their claim against defendant No.3 and the suit will have to be dismissed sofar as defendant No.3 is concerned. The plaintiffs have claimed interest @21% per annum as set out to the tune of Rs.3,59,335/- from 9.3.1989 till the filing of the suit. This figure is arrived at on the basis of rate of interest being 21% per annum. The plaintiffs’ witness Mr.Gurmeet Singh, P.W.No.1 has, in paragraph 19 of the evidence affidavit stated that the nationalised banks used to lend monies for unsecured : 15 : loans at about 15% to 18% at the relevant time as the Prime lending rate was itself 12%. The plaintiffs have not been able to place before the court any agreement so as to charge interest @21% per annum. Except the bare word as regards the rate of interest being charged as the nationalised banks as set out in paragraph 19 of evidence affidavit, there is no other explanation coming forth as to how the plaintiffs have charged interest @21% per annum. In my view, keeping in mind all the relevant dates, namely, the goods having reached the Bombay Port on 2.12.1987 or thereabout, the demand being made in the year 1989 and the suit being filed in the year 1992 and keeping in view the fact that defendant Nos.1 and 2 are the insurance companies, who had agreed to insure the damage caused to the goods, if interest @12% is granted to the plaintiffs, it would meet the ends of justice and to that extent, I am inclined to pass a decree in favour of the plaintiffs so as to grant interest @12% per annum on Rs.5,48,298/- from 9.3.1989 till 6.4.1992 i.e. upto the date of filing of the suit. Sofar as the grant of interest after the filing of the suit, keeping in view the provisions of Section 34 of the Code of Civil Procedure , if interest @6% is granted, it would meet the ends of justice. The plaintiffs would also be entitled to receive : 16 : costs of the suit. 18. Keeping in view the aforesaid discussion, Issue No.6 is being answered "As per the operative part". Issue No.7 :- Issue No.7 :- Issue No.7 :- ============= ============= ============= 19. Issue No.7 is also answered "As per the operative part. 20. For the reasons mentioned aforesaid, I pass the following decree :- D E C R E E D E C R E E D E C R E E i) Defendant Nos.1 and 2 jointly or severally do pay to plaintiffs Rs.5,54,518/-. ii) Defendant Nos.1 and 2 jointly or severally do pay to plaintiffs interest @12% per annum from 9.3.1989 till 6.4.1992 on Rs.5,54,518/-. iii) Defendant Nos.1 and 2 jointly or severally : 17 : do pay to plaintiffs interest @6% per annum from 7.4.1992 till realisation on Rs.5,54,518/-. iv) Defendant Nos.1 and 2 jointly or severally do pay to plaintiffs costs of the suit. v) Suit is dismissed as against defendant No.3 with no order as to costs. (R.Y. GANOO,J.) (R.Y. GANOO,J.) (R.Y. GANOO,J.)