Savani Transport (P. ) Ltd. , represented by its Divisional Manager, S. M. S. Jain v. The Madras Aluminium Company Ltd. , Coimbatore represented by its Director, Venkataswami Naidu and others
1978-07-25
S.RATNAVEL PANDIAN, T.RAMAPRASADA RAO
body1978
DigiLaw.ai
Ramaprasada Rao, CJ. -The second defendant, who was the carrier and who was not successful in O.S. No. 479 of 1970 on the file of the Subordinate Judge of Coimbatore, is the appellant. The plaintiff, whose head-office is at Coimbatore and factory at Mettur inter alia agreed to sell to the first defendant goods of the value of Rs. 63,038.01 and in pursuance of such an understanding it entrusted the said goods to the second defendant, who was the carrier and who was also having branch offices at Coimbatore and Mettur. It is common ground that the goods were loaded under Exhibits B-l and B-2 which constitute the contract of affreightment. It was made clear even at the time of entrustment of the goods with the second defendant that the consignee was the Punjab National Bank at Eluru, where the first defendant was carrying on business, that the negotiable documents were to be handed over to the Punjab National Bank for collection and retirement of the demand draft representing the value or the price of the goods and that the documents of title to the goods ought not to be parted to any one other than the Punjab National Batik, who, for all purposes for this suit, could be described as the consignee. It happened that the second defendant did not have a lorry of his own at the time when the goods were to be transmitted from Coimbatore to Eluru . and, therefore, he requisitioned the lorry belonging to the third defendant. It appears that D.W. 3 drove the vehicle and there is some dispute, as Would be seen hereafter, whether it was D.W. 3, who drove the vehicle, who gave away the documents of clearance to the first defendant without reference to the consignee, or D.W. 4, who, according to the third defendant, was driving the vehicle. The fact remains that contrary to the express directions given by the consignor, namely, the plaintiff, the second defendant or his agents; whether it is the third defendant’s driver or any other person, actually delivered the documents of title to the first defendant, who, without paying for the goods and without signing the documents of title as was agreed to, took over the documents and failed to pay the price.
The plaintiff, therefore, was obliged to call upon both the first defendant as well as the second defendant to account for the value of the goods — the first defendant as the person to whom the goods were delivered by the second defendant without the requisite authority to do so, and as against the second defendant as the transporter of the goods who failed to adhere to the terms of contract of affreightment read along with the instructions which accompanied it, which compelled him to deliver the documents of title not to the first defendant but to the Punjab National Bank, which was the accredited consignee in the bargain. The suit was, therefore, laid by the plaintiff for the value of the goods. But it should be made, however, clear as would be seen hereafter, that the second defendant, for reasons not very clear, collected two drafts and a cheque, as seen from Exhibits A-ll, A-12 and A-13 obtained by him from the first defendant and then passed them on to the plaintiff towards the price of the goods. The cheque, which was enclosed along with Exhibit A-13 did bounce and on account Of such failure of consideration of the negotiable instruments and also because part of the price of the goods was not paid by the first defendant and additionally for the reason that the second defendant as a carrier was negligent in the discharge of his duties under the contract of affreightment and committed the plaintiff to loss, the suit was filed for recovery of the unaccounted value of the goods against both the first and the second defendants. The first defendant remained ex parte. The second defendant, in the first instance, filed a written statement on 21st September, 1970 raising various pleas on merits. On the eve of the trial of the suit, however, about three years later, he sought surprisingly enough, for permission to file an additional written statement and obtained such permission on 21st February, 1973. In the additional written statement the plea was that the Court at Coimbatore did not have the jurisdiction to entertain the claim as there was a clause which was printed at the back of Exhibit B-l, which stipulates that all disputes arising under or out of the contract of entrustment or affreightment shall be adjudicated by Courts at Bombay.
In the additional written statement the plea was that the Court at Coimbatore did not have the jurisdiction to entertain the claim as there was a clause which was printed at the back of Exhibit B-l, which stipulates that all disputes arising under or out of the contract of entrustment or affreightment shall be adjudicated by Courts at Bombay. After having filed the additional written statement, the second defendant once again, with the obvious intention of safeguarding his rights, sought for permission to implead the third defendant and also for relief as against the third defendant in case a decree is passed against him after trial. This was attempted under the special procedure available to a defendant in a litigation under Order 8-A of the Civil Procedure Code. It is common ground that the second defendant in that procedure, known as the third party procedure, claimed to be entitled to contribution from ox indemnity against the first defendant, who was already on record and the third, defendant, whom he wanted to implead as a party to the action and that third party summons was also issued. With such pleadings so completed, trial proceeded and, the learned Judge negatived all the defences of the second defendant and decreed the suit as against defendants 1 and 2 and would not agree with the claim of the second defendant that he is entitled to contribution from the third defendant under the third party procedure. It is as against this, the present appeal has been filed. 2. We have not dealt with the merits of the case because they are not in dispute. In fact, learned counsel for the appellant confined his contentions to five points before us. The first one was that it is only the Bombay Court which had jurisdiction to entertain the suit and the Court at Coimbatore could not entertain it and that the suit, therefore, was not maintainable. Secondly, it was said that there is a misjoinder of causes of action. The third contention was that by acceptance of the drafts and the cheque, which were sent as enclosures to Exhibits A-ll, A-12 and A-13, there has been a waiver of the second defendant’s liability by an overt act on the part of the plaintiff and, that therefore, no decree can be passed as against him.
The third contention was that by acceptance of the drafts and the cheque, which were sent as enclosures to Exhibits A-ll, A-12 and A-13, there has been a waiver of the second defendant’s liability by an overt act on the part of the plaintiff and, that therefore, no decree can be passed as against him. The fourth point was that the claim for interest as against him as if he is a primary party responsible to the plaintiff in the bargain is an extreme relief granted to the plaintiff. The last contention, which arose incidentally after the acceptance of the third party procedure by the trial Court, is that the third defendant also should have been made liable and should have been asked to contribute for payment of the decree which was passed against the appellant and the exoneration by the lower Court of the third defendant is wrong and, therefore, the judgment to that extent has to be interfered with. No other point either on merits or on law was argued before us. 3. In so far as the first point is concerned, it is well-established that when there are two competent Courts which could entertain a cause of action, then the parties could make a choice oh their own and vest the jurisdiction to adjudicate any dispute inter se amongst themselves in one of such competent Courts. The question, therefore, is whether the Bombay Court is a competent Court at all to enable the parties hereto to make a choice out of the Court in Bombay and the Court at Coimbatore. The order was placed by the first defendant at Coimbatore, as is seen from Exhibit A-33. This order was transmitted to the plaintiff’s factory at Mettur under Exhibit A-34. As the first defendant was at Eluru, a carrier was sought,for. The second defendant, who was having various branch offices and his head office at Bombay, had a branch office both at Coimbatore as well as at Mettur. He was contacted, and the goods were handed over at the factory site at Mettur, as is seen from Exhibits B-l and B-2. The principal contention of Mr.
The second defendant, who was having various branch offices and his head office at Bombay, had a branch office both at Coimbatore as well as at Mettur. He was contacted, and the goods were handed over at the factory site at Mettur, as is seen from Exhibits B-l and B-2. The principal contention of Mr. Varadarajan, learned counsel for the appellant, is that under Exhibit B-l there is a reference to the conditions on the reverse and that this is to be found in a prominent part in the front portion of Exhibit B-l. The clause relied upon is that the contract shall be deemed to have been entered into and made with the adminislirative and Head Office of the company at Bombay and that it is, therefore, expressly agreed that the Courts in Bombay alone shall have jurisdiction in respect of all claims and matters arising under the consignment or of goods entrusted for transport. This is not a contract which is enforceable in the eye of law. The plaintiff, who has the head office in one part of India, cannot of his own motion and without regard to the provisions of the Civil Procedure Code, say, that, notwithstanding the fact that his commercial activities are in any other State or in any other part of the country, such commercial activities and problems arising thereunder shall and should be adjudicated upon by the Bombay Courts and Bombay Courts alone. This is against the spirit of the law of contracts and against the prescribed procedure under section 20 of the Civil Procedure Code. Section 20 provides for suits to be instituted where the defendant resides or the cause of action arises. It is more for the benefit of the plaintiff who can find the defendant and institute the action at the place where he resides or where he caries on business, No doubt, the Explanation to section 20 says that a corporation shall be deemed to carry on business at its sole or principal office in India or in respect of any cause of action arising at any place where it has also subordinate office at such place. This is pressed into service. We are afraid this is against the appellant.
This is pressed into service. We are afraid this is against the appellant. The Explanation is only explanatory of the situtation and the fiction that a corporation sha11 be deemed to carry on business at its sole or principal office is a general statement having regard to the provisions of the Companies Act and the specific prescribed procedure in the Civil Procedure Code. But the latter pari of the Explanation makes it clear that, in respect of any cause of action arising at any place where it has also a subordinate office the cause of action should be deemed to arise at such place also. This is a case where the second defendant has no doubt his head-office at Bombay, but admittedly it has its subordinate office both at Coimbatore and a Mettur. It is as a result of the negotiations which took place as between the plaintiff on the one hand and the second defendant on the other, either at Coimbatore or at Mettur, that the contract of affreightment has come into effect. Therefore, even on the Explanation relied upon by the learned counsel for the appellant the cause of action has arisen at Coimbatore. As already stated, clause (17) at the back of Exhibit B-l ought not to be interpreted to mean that the parties have contracted specifically as to the choice of the Court in which they should agitate. Such a choice, as we made it clear even in the beginning, can only be thought of when there are two competent Courts which can entertain a cause. That is not the case here. The Bombay Court is not the competant Court so far the cause of action which Ms arisen in this case is concerned. It has arisen at a place where the subordinate office of the second defendant is situate. Therefore, it has arisen either at Coimbatore or at Mettur. There was, therefore, no choice left to the parties such as the plaintiff and the second defendant to choose as between Courts in Bombay and at Coimbatore.
It has arisen at a place where the subordinate office of the second defendant is situate. Therefore, it has arisen either at Coimbatore or at Mettur. There was, therefore, no choice left to the parties such as the plaintiff and the second defendant to choose as between Courts in Bombay and at Coimbatore. Therefore, clause 17 would not be applicable to the facta of this case and even if it was intended that the second defendant made it obligatory that all disputes shall be adjudicated only in Bombay by reason of such a contract, then such a contract is unenforceable because, that contract does not reflect upon the intention of the parties, in the matter of the election exercised as between them with’ regard to the choice of one of the competent Courts.. We are unable, therefore, to agree with the first contention that the Coimbatore Court had no jurisdiction to entertain the claim. We may also add that the challenge against jurisdiction was hesitantly taken. We have already seen that for nearly three years the plea was not taken until an additional written statement was filed with permission. That was nearly three years after the filing of the original written statement. Even before us, in the grounds of appeal, there is no. specific plea that the Bombay Court alone has jurisdiction to enterfain the suit. We are not therefore, satisfied that the plea that the suit is not maintainable in the Court at Coimbatore is sustainable. 4. The second Contention is that there is misjoinder of causes of action. We have seen that the suit itself is based on the plea that there has been a total loss to the plaintiff who entrusted their goods with the second defendant for carriage and which goods were wrongfully delivered by the agent of the second defendant to the first defendant, even though the specific named consignee was the Punjab National Bank. In these circumstances, the plaintiff came to Court with two factors which Were known" to him, firstly that his goods have gone into the hands of the first defendant, who, even though, was aware of his responsibility to pay for it, did not pay, and secondly that it Was due to the act of negligence on the part of the second defendant and/or his agents that the goods were delivered to the first defendant.
The suit no doubt could be said to be for recovery of the part price of the goods. But the case of recovery of damages for the negligence on the part of the second defendant is so intricately connected with the main cause of action that it could be fairly presumed that at is such an integrated sequence of Events that gives a cause of action to the plaintiff to file the present suit. It cannot, therefore, be Said that impleading the first defendant as the person who is responsible for the payment of the price of the goods and making the second defendant also contemporaneously liable for the loss occasioned to the plaintiff on accounts of the misdelivery of the goods are so far as under from one another that it could be said that there is ho commensality in the cause of action as pleaded by the plaintiff. We are unable to agree that there is misjoinder of causes of action. 5. . The third contention of the appellant was that by reason of the acceptance of the drafts and the cheque which were the enclosures to Exhibits . A-ll, A-12 and, A-13, there has been a waiver of the second defendant’s responsibility. This is based on the contention that the plaintiff having accepted the drafts and having been put on notice of the dishonour of the cheque, he should be deemed to have exonerated the second defendant from further liability.. This would be begging the question. The second defendant throughout was acting independently and was trying probably to keep the fair name as a carrier by persuading the first defendant to pay for the goods wrongfully delivered to him. It was this activity of the second defendant which resulted in the collection of the drafts and the sending of the cheque to the first defendant. It was not as if the first defendant volunteered to pay the amount to the plaintiff and there has been an independent negotiation and resultant settlement between the plaintiff and the first defendant without reference to the second defendant.
It was not as if the first defendant volunteered to pay the amount to the plaintiff and there has been an independent negotiation and resultant settlement between the plaintiff and the first defendant without reference to the second defendant. If at all any payment was received from the first defendant, either in the shape of drafts or by means of cheque which was ultimately dishonoured, it was only at the instance of the second defendant who assumed responsibility from the beginning and that cannot be understood, and much less misunderstood, as giving up of the rights which had already accrued in favour of the plaintiff as against the second defendant. Thus, therefore, there, is no waiver of the right to claim loss from the second defendant as pleaded by him. 6. The next point urged was that the appellant is not liable to pay interest as it is only the first defendant who is primarily responsible for non-payment of the price of the goods We have-already referred to the fact that the loss which? was occasioned to the plaintiff in the instant case is not attributable solely to the non-payment of the price by the first defendant, but to the negligent act on the part of the second defendant and or his agent. In that sense, therefore, if the second defendant is liable to pay the principal amount claimed, then it follows that he is liable to pay interest as well. 7. The final contention of the second defendant is that the lower Court was wrong in having exonerated the third defendant, though he was brought into the arena" of the case under; the special third party, procedure. The merits have been fully considered by the learned Subordinate Judge, and we are not inclined to repeat them. What is relied upon by the appellant in Exhibit B-3, which, according to him, establishes that it was the driver of the third respondent who irregularly delivered the goods without regard to the plaintiff’s mandate in the invoice that it should be so delivered to the consignee, the Punjab National Bank. It may be so. But the third defendant wis only acting as the agent of the second defendant in the matter of the carriage of goods entrusted to him (second defendant). The third defendant was never in the picture. He was brought into the picture by the second defendant.
It may be so. But the third defendant wis only acting as the agent of the second defendant in the matter of the carriage of goods entrusted to him (second defendant). The third defendant was never in the picture. He was brought into the picture by the second defendant. In fact, he treated the third defendant independently paid the freight charges payable to him, filed a small cause suit O.S. No. 318 of 1970 on the file of the District Munsif, Eluru and made the first defendant liable for such freight charges paid by him to the third defendant. In all respects, therefore, the second defendant treated the third defendant as a party different from the parties to the main transation. He only took him for purposes of carriage and if he had any independent cause of action against him, he could agitate it in other proceedings, but not in a summary procedure under the third party procedure. We are not expressing; however, an opinion on this finally as it is not necessary to do so. The finding of the Court below is that Exhibit B-8, on which sole reliance is placed upon by the second defendant to make the third defendant liable for the said claim has been found to be not acceptable Though it has been sighed by D.W. 3, yet it was brought out that he did not have any knowledge of its contents as it was dictated by the second defendant’s agent examined as D.W. 2 That was written in English and D.W. 3 did speak to the fact that he was hot aware of its contents and that he "signed after the "same was dictated by D.W. 2. The finding of fact is that D.W. 3 did not have any knowledge of its contents. Even on a fair, examination of Exhibit B-8 it is seen that it was a typed letter in which the driver’s signature is taken. Factually we accept the findings of the Court below that the driver cannot be said to have had knowledge of the contents of Exhibit B-8 and. that therefore, the third defendant cannot vicariously be made responsible for what his employer said in Exhibit B-8.
Factually we accept the findings of the Court below that the driver cannot be said to have had knowledge of the contents of Exhibit B-8 and. that therefore, the third defendant cannot vicariously be made responsible for what his employer said in Exhibit B-8. Further, no negligence on the part of the third defendant or his driver has been established with, certainty and, therefore, the claim for indemnity or contribution which could only be claimed by one defendant as against the other in the third party procedure is not sustainable. The lower Court was right in having exonerated the third defendant. 8. In the result, the appeal fails and it is dismissed. In the .circumstances, there, will be no order as to costs.