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2006 DIGILAW 40 (DEL)

NAHAR SPINNING MILLS LTD v. VIJAY HOSIERY CO. LTD

2006-01-09

body2006
BADAR DURREZ AHMED, J. ( 1 ) THIS application has been moved by the defendant No. 4 (Gulf Air), under order VII Rule 11 for rejection of the Plaint on two grounds:- (1)The plaint does not disclose any cause of action as against the defendant no. 4. (2)The suit as against defendant No. 4 is not maintainable as being time barred. The Back ground: ( 2 ) THE plaint was originally filed at Ludhiana on 1. 10. 1993. It was numbered as s. No. 458/1993. The defendant No. 4 (Gulf Air) had filed an application, inter alia, objecting to the plaint on the ground of lack of jurisdiction and there being no cause of action disclosed against it. That application was dismissed by the Court at Ludhiana. The defendant No. 4 preferred a Civil Revision before the Punjab and Haryana High Court which decided the same in favour of the defendant No. 4 on 7. 9. 1999. In other words, the Punjab and Haryana High Court held that the Court at Ludhiana did not have the jurisdiction to entertain the suit. Being aggrieved thereby, the plaintiff filed a Special Leave Petition under Article 136 of the Constitution of India before the Supreme Court. The same was dismissed in limine by the Supreme Court. As a consequence, the Court at Ludhiana, on 12. 10. 2000, returned the plaint to the plaintiff for presentation of the same in a Court of Competent jurisdiction. This is apparent from the endorsement made on the reverse of page 1 of the plaint which also bears the seal of the Court of the Civil Judge, Senior Division, Ludhiana. Within 18 days of the return of the plaint, the same was filed in this Court on 30. 10. 2000. The Plaintiff s case as set out in the Plaint: ( 3 ) THE suit is for recovery of an amount of Rs 22,39,450/- representing a principal amount of Rs 19,59,250/- and interest with effect from 15. 12. 1992 to 30. 9. 1993 amounting to Rs 2,80,200/ -. The recovery of the aforesaid amount has been sought as representing the price of goods (including interest) allegedly supplied by the plaintiff to the defendants 1 and 2. 12. 1992 to 30. 9. 1993 amounting to Rs 2,80,200/ -. The recovery of the aforesaid amount has been sought as representing the price of goods (including interest) allegedly supplied by the plaintiff to the defendants 1 and 2. Upon a reading of the plaint in its entirety, the case of the plaintiff appears to be that the defendants 1 and 2 placed orders on the plaintiff in respect of certain cotton and woolen products. The defendants 1 and 2 are carrying on business as importers and dealers of cotton and cotton textiles as well as woolen products from their place of business at Manchester, U. K. There are averments contained in the plaint to the effect that the contract was with defendant No. 1 who purportedly had assigned it to Defendant No. 2 that the plaintiff had not consented to the said assignment. Insofar as a decision on this application is concerned, it is not necessary for me to go into these aspects and I am proceeding on the basis that defendants 1 and 2 are essentially one party. The plaintiff has alleged that the arrangement was that the goods shall be supplied by the plaintiff to the defendants 1 and 2 at Manchester against a Letter of credit. The goods were to be transported by carriers including the defendant no. 4. The Letter of Credit was to be negotiated against various documents presented to the defendant No. 3. These documents included the original Airway bill, Invoices, Packing List etc. It is alleged in paragraph 11 of the plaint that pursuant to the terms between the plaintiff and the defendants 1 and 2, on or about 14. 12. 1992 the plaintiff delivered to the defendant No. 4 (Gulf Air) for onward transmission to the defendant No. 1 diverse quantities of goods covered by various orders numbers for a total c. i. f. Value of U. S. 60,440. It is further stated in the said paragraph 11 that the said delivery was evidenced by the airway Bill No. 072-2468 dated 14. 12. 1992. In paragraph 17 of the plaint it is averred that by a letter dated 21. 1. 1993 the defendant No. 6 informed the plaintiff that defendant No. 3 had purported to rejected the documents which were furnished by the plaintiff for receiving payment under the Letter of Credit. 12. 1992. In paragraph 17 of the plaint it is averred that by a letter dated 21. 1. 1993 the defendant No. 6 informed the plaintiff that defendant No. 3 had purported to rejected the documents which were furnished by the plaintiff for receiving payment under the Letter of Credit. Some of the grounds for rejection of the documents were:- 1. LC expired. 2. Late shipment. 3. Shipment effected from Delhi to Bombay. 4. Insurance Certificate presented in lieu of Policy which is dated l than Flight date in Air Way Bill. 5. Insurance does not cover transhipment risks. 6. Photocopy of Certificate of Origin presented. 7. Photocopy Generalised System of preference Certificate of origin Form A presented. 8. Photo copy export Certificate presented. 9. Inspection Certificate not presented. ? according to the plaintiff the rejection of the documents by defendant No. 3 was wrongful and illegal and in breach and violation of the terms of Letter of credit itself. Therefore, according to the plaintiff, it is entitled to claim a sum of U. S. 66,696 from the defendant No. 3 as well as interest thereon @ 18% per annum. ( 4 ) IN paragraph 19 of the plaint, the plaintiff has averred that though the defendant No. 3 purported to reject the documents and returned the same to the defendant No. 6, it transpired that the defendant No. 1 and/or defendant No. 2 obtained delivery of the said consignments from the defendant No. 4. On the basis of this averment, the plaintiff claimed that the defendants 1 and 2, having taken delivery of the goods in question and utilised the same, were liable to the plaintiff for the price of the said goods and, accordingly, in paragraph 21 of the plaint, it is averred that there is a sum of Rs. 22,39,450/- (U. S. 62,696) including interest now due and owing from by the defendants 1,2 and 3 jointly and severally as per particulars set out in the said paragraph. ( 5 ) A claim against the defendant No. 4 has also been made and such claim is entirely founded from the averments contained in the paragraphs 22 and 23 of the plaint which reads as under:- "22. Delivery of the goods has been taken of the said two consignments by the Defendant No. 1 and/or 2 from the defendants 4 and 5 respectively. Delivery of the goods has been taken of the said two consignments by the Defendant No. 1 and/or 2 from the defendants 4 and 5 respectively. Such delivery has been given by the Defendants 4 and 5 despite the fact that the original negotiable set of documents and particularly the consignee s copy of the Airway Bill could not have been presented to the said defendants as the said documents were returned by the defendants No. 3 to the plaintiff through the defendant No. 6. In the circumstances, the said defendants No. 4 and 5 have handed over the goods to the defendants No. 1 and/or 2 wrongfully and illegally and in breach and violation of the terms and conditions of the contract for carriage of goods entered into between the said defendants and the plaintiff in respect of the said two consignments. By reason of the aforesaid the plaintiff has suffered loss and damage and expenses which the plaintiff is entitled to claim and claims from the said defendants. The plaintiff is also entitled to claim and claims interest on the aforesaid amount at the rate of 18%per annum. The said rate of interest is the reasonable rate of interest given the commercial nature of the transaction between the parties. 23. That in the circumstances, there is a sum of Rs. 22,39,450/- due and owning by the defendant No. 4 to the plaintiff as per the particulars set out hereunder which sum or any part thereof the defendant has failed and neglected to pay despite repeated requests and reminders:-