IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE A.K.BASHEER & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN FRIDAY, THE 26TH JUNE 2009 / 5TH ASHADHA 1931 A.S.No. 482 of 1995 (C) ------------------------------------- OS.62/1992 of Ist ADDL.SUB COURT, KOCHI .................... APPELLANT/2 nd DEFENDANT IN O.S.62/92: SHIPPING CORPORATION OF INDIA LTD. SHIPPING HOUSE 245 MADAME CAME ROAD BOMBAY 400 021. BY ADV. SRI K.P.VIJAYAN, BOBY MATHEW SMT PRIYA MANJOORAN RESPONDENTS/PLAINTIFFS 1 AND 2 & IST DEFENDANT RESPECTIVELY IN O.S.NO.62/92 1. COCHIN STEAMER AGENTS ASSOCIATION PEIRCE LESLIE BUILDING WILLINGDON ISLAND KOCHI 3 REPRESENTED BY ITS SECRETARY 2. KURUSINKAL THOMAS 24/1303, VENKATARAMAN ROAD WILLINGDON ISLAND KOCHI 3 AS A PARTNERSHIP FIRM REP BY ITS PARTNER KURUSINKAL THOMAS 3. NEW DHOLERA SHIPPING & TRADING CO. LTD. CUTCH CASTLE, 4TH FLOOR, NEW OPERA HOUSE, BOMBAY 4 AND HAVING ITS BRANCH OFFICE AT CC VI/942, BAZAR ROAD, KOCHI 682 002. ADV. SRI.R.D.SHENOI, ADV. SRI. K.ANAND THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 26/06/2009 , THE COURT ON 26/06/2009 DELIVERED THE FOLLOWING: A.K.BASHEER & P.S.GOPINATHAN, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - A.S.No.482 OF 1995 - C - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 26th day of June, 2009 JUDGMENT Basheer, J: Defendant No.2 in a suit for money is the appellant. The suit was instituted by respondents 1 and 2 herein seeking to recover a total sum of Rs.1,84,480.46/- allegedly due from the defendants towards wages and other incidental payments for the watchmen engaged in the vessels belonging to the appellant for the period from January 1, 1988 to April 30, 1990. 2. Though the suit was resisted by the defendants, the court below decreed the suit with cost holding that defendants were liable to pay the amount claimed in the plaint. Accordingly the impugned decree was passed in terms of the plaint claim directing the defendants to pay Rs.1,03,234.86 with 18% interest per annum from the date of suit till the date of decree and thereafter to pay interest at the rate of 6% p.a. till realisation. It was made clear that the liability of the defendants to discharge the decree debt shall be joint and several. The above decree and judgment are impugned in this appeal by defendant No.2 in the suit. 3. The plaint averments may be briefly noticed. 4. Plaintiff No.1 is engaged in the business of supply of watchmen for watch and ward duty in vessels which are berthed at the Cochin Port. Plaintiff No.2 was the administrative agency of plaintiff No.1.According to the plaintiffs, stevedoring operations of the vessels that call at the Port of Cochin were being carried out by stevedoring contractors duly licensed by the Cochin Port and in A.S.No.482 OF 1995 - C :: 2 :: terms of the relevant rules framed for that purpose, particularly, the 'Cochin Port (Issue of Stevedoring License) Regulations, 1987. Plaintiff No.2 was appointed as the administrative agency under plaintiff No.1. Defendant No.1 was the stevedore for the second defendant. In addition to the stevedoring works, the stevedores shall have to make arrangements for getting the services of steamer watchmen on board vessels at the Port. According to the plaintiffs, defendant No.1 had engaged two contractors by name N.Hassinar and M.K.Hussain for booking watchmen for duty on the vessels of defendant No.2/appellant. Although defendant No.1 had been honouring the bills raised by plaintiff No.2 for supply of watchmen based on indents placed through their contractors mentioned above, the bills for the period from January 1, 1988 till April 30, 1990 were not duly honoured and payments were not made by the defendants. The total amount payable by the defendants for the period mentioned above came to Rs.1,03,234.86. It was the said amount that was sought to be recovered from the defendants. The plaintiffs contended that defendant No.1 was given a statement of account disclosing the details of the bills that remained unpaid. On December 15, 1989 second plaintiff sent a letter to defendant No.1 specifically adverting to the statements furnished on August 24, 1994 and September 8, 1989 and requesting for payment. But the bills raised by plaintiff No.2 remained unpaid. Plaintiff No.1 thereafter sent a letter to defendant No.1 on April, 16, 1990 requesting for discharge of the liability. In response to the communication sent to A.S.No.482 OF 1995 - C :: 3 :: defendant No.2, a reply was sent to plaintiff no.2 stating that 90% of the amounts due had been already paid to defendant No.1. It was in the above circumstances, that the suit was instituted by the plaintiffs against the defendants seeking recovery of the amounts due. 5. In the written statement filed by defendant No.1, it was contended that the plaint claim was barred by limitation. It was further contended that the plaintiffs had agreed to recover all the amounts due under the transaction from defendant No.2, Shipping Corporation of India Limited, for whose work the entire liability under the plaint transaction arose. It was therefore contended that in view of the above undertaking given by the plaintiffs, they were estopped from making any claim against defendant No.1. According to defendant No.1, the remedy of the plaintiffs lay exclusively against defendant No.2. It was further contended that the amount due from defendant No.2 to defendant No.1 was more than what was allegedly due to the plaintiffs. It was alleged that because of the delay in settling the dues between the plaintiffs and defendant No.2, irrecoverable injury and loss was caused to defendant No.1. 6. In the written statement filed by defendant No.2/appellant, it was primarily contended that the suit claim was barred by limitation. It was further contended that defendant No.2 had never acknowledged or admitted the liability under the bills for the period in question either on May 15, 1990 or any other date in the joint meeting as alleged in the plaint. The other A.S.No.482 OF 1995 - C :: 4 :: contention raised by defendant No.2 was that there was no privity of contract between the Corporation and the plaintiffs. Defendant No.1 was only a stevedores contractor and not an agent of defendant No.2 to provide watchmen to the ship berthed at the Cochin Port at the relevant time. Defendant no.2 had never authorised defendant No.1 to act as its agent in the alleged transaction. Defendant No.1 had no authority to act as such either. Defendant No.2 had never requested the plaintiffs to provide watchmen staff to its vessels. It was further contended that a sum of Rs.1,65,668.74/- was payable by defendant No.2 in connection with the transaction between them. Though defendant No.2 had attended a meeting convened by the plaintiffs in order to discuss matters of common interest, it did not mean that any liability was admitted. In short, defendant no.2 disowned any responsibility to satisfy the plaint claim. 7. The court below framed relevant issues on the basis of the pleadings of the parties. PWs 1 and 2 were examined on the side of the plaintiffs. Exts.A1 to A111 were also marked on their side. There was no oral or documentary evidence on the side of the defendants. 8. While dealing with the issue relating to maintainability of the suit, the court below noticed that defendant no.2 had not shown any specific reason or ground in support of its plea of non-maintainability of the suit. Ext.A111 was the registration certificate issued to plaintiff No.1 by the competent authority. It was also a society registered under the Travancore- A.S.No.482 OF 1995 - C :: 5 :: Cochin Literary, Scientific and Charitable Societies Registration Act, 1955. Therefore, the court below held that the suit was maintainable. 9. As regards the plea of bar of limitation, the court below noticed that the plaint claim was based on 89 bills raised by plaintiff No.2. Exts.A35 to A89 were evidently and apparently not barred by limitation. It was further noticed that in respect of Exts.A1 to A34 bills defendant No.1 had acknowledged the liability twice viz. on February 26, 1990 and August 9, 1990 as revealed from Exts.A91 and A104 respectively. The liability was so acknowledged within the period of limitation. The suit was instituted on March 9, 1992. The court below held that defendant No.1 being the agent of defendant No.2, the acknowledgment made by the former under Section 18 of the Limitation Act was binding on defendant No.2 also. Further since both the defendants failed to produce the relevant documents and materials to prove the inter se relationship between them, it was held by the court below that the defendants cannot be heard to say that the plaint claim was barred by limitation. 10. But Exts.A1 to A34 bills were admittedly beyond three years as on the date of institution of the suit. Though the plaintiffs had pleaded that the defendants had acknowledged and admitted the liability in a joint meeting held between the parties, no supporting documents were produced. The oral evidence adduced by the plaintiffs also did not help. The plaintiffs had not produced any documents to show that defendant No.2/appellant had A.S.No.482 OF 1995 - C :: 6 :: acknowledged debt or liability in writing or had authorised defendant No.1 in writing to acknowledge the liability on its behalf as mandated by Section 18 of the Limitation Act, 1963. In that view of the matter, we are satisfied that the plaintiffs will not be entitled to recover the amount covered under Exts.A1 to A34 bills. But since Exts.A35 to A89 bills are not barred by limitation, the plaintiffs will be entitled to recover the same jointly and severally from the defendants. 11. The court below, while considering the question whether there was any privity of contract between the plaintiffs and defendant No.2 and also whether defendant No.2 was an unnecessary party to the suit, held that the evidence on record clearly indicated that watchmen were supplied to do duty on the vessels of defendant No.2 by the plaintiffs on the basis of the request made by defendant No.1. The court below noticed that plaintiffs had adduced oral evidence to prove that the first defendant was the agent of the second defendant at the relevant time. The defendants did not adduce any contra evidence, nor did they produce any document in support of their bald averments made in their respective written statements. In fact, in Ext.A105, defendant No.2 had informed plaintiff No.1 that the future bills starting from May 1990 in respect of watchmen supplied by the plaintiffs would be settled by M/S Jairam and Sons the new agents of defendant no.2. Ext.A105 was specifically with reference to the claim for settlement of outstanding bills for the period from January 1989 till May 1990 issued by plaintiffs in respect of A.S.No.482 OF 1995 - C :: 7 :: engagement of watchmen on board vessels belonging to defendant No.2. Ext.A105 clearly revealed that there existed some relationship between defendant No.1 and 2, though it did not specifically spell out the relationship of principal and agent. The fact that defendant No.2 had appointed a new agent in the place of defendant No.1 also indicated that defendant No.1 was in fact treated as an agent of defendant No.2 till the appointment of M/S Jairam and Sons. Anyhow, defendant No.2 had not bothered either to step into the box or to produce any documents in order to controvert or dispute the contentions raised by the plaintiffs. Defendant No.2 had in fact admitted in the written statement that defendant No.1 was the agent of its stevedoring contractor in the relevant transaction. Therefore, defendant No.2 ought to have been imputed with the knowledge about the true nature of its relationship with defendant No.1. But this burden was not discharged by defendant No.2 Moreover, the contention of defendant No.2 was that 90% of the amount payable towards the wages and other dues to the watchmen were paid by it to defendant No.1 already. This also indicates that services of watchmen supplied by the plaintiffs were utilised by defendant No.2 through defendant No.1 for its vessels. We have carefully perused the written statement filed by defendant No.2. In our view, the contentions discernible from the written statement of defendant No.2 are only equivocal and none to convincing or categoric. The attempt of defendant No.2 was only to pass on the liability to defendant No.1. If in fact 90% of the amounts had been paid A.S.No.482 OF 1995 - C :: 8 :: to defendant No.1 towards the liability payable to the watchmen, corresponding documents could have been produced by defendant No.2. But no such documents were produced by defendant No.2 before the court. 12. Having carefully perused the entire materials available on record, we are satisfied that the court below was justified in holding that defendants were liable to discharge the liability. In this context, we may also refer to one suggestion put by the learned counsel for defendant No.2 in the course of cross examination of PW1. The suggestion was whether it was not correct to say that defendant No.1 had not been acting as the agent of several other shipping companies apart from that of defendant No.2. This suggestion, as rightly noted by the court below, throws considerable light on the relationship between defendant No.1 and 2. Anyhow, in the absence of any contra evidence adduced by defendant No.2, and also on the face of the materials produced by the plaintiffs, we are satisfied that the court below had rightly held that the defendants were liable to discharge the liability covered under the bills other than Exts.A1 to A34. The decree granted by the court below is, therefore, liable to be modified accordingly. 13. Therefore, in lieu of the amount of Rs.1,03,234.86/-, the plaintiff shall be entitled to recover only a sum of Rs.92,003.15/- from the defendants. As regards interest also we are satisfied that interest awarded at the rate of 18% from the date of plaint till the date of decree is on the higher side. In the absence of any contract between the parties, we are of the view that A.S.No.482 OF 1995 - C :: 9 :: plaintiffs are not entitled to claim 18% . In our view, interest of justice will be met, if the defendants are directed to pay interest on the plaint claim at the rate of 12% from the date of plaint till the date of decree. The plaintiffs shall be entitled to get interest at the rate of 6% from the date of decree till the date of realisation. The appeal is allowed to the above extent. In all other respects the decree passed by the court below is confirmed. (A.K.BASHEER, JUDGE) (P.S.GOPINATHAN, JUDGE) jes A.S.No.482 OF 1995 - C :: 10 :: A.K.BASHEER & P.S.GOPINATHAN, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - A.S.No.482 OF 1995 - C - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - JUDGMENT Dated 26th June, 2009