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2025 DIGILAW 552 (TS)

Patel Integrated Logistics Limited v. Vikkys Agrisciences Private Limited

2025-05-01

G.RADHA RANI

body2025
JUDGMENT : G.RADHA RANI, J. This appeal is filed by the appellant-defendant aggrieved by the judgment and decree dated 16.03.2018 in O.S No.638 of 2016 on the file of the IV Senior Civil Judge, City Civil Court, Hyderabad. 2. The respondent is the plaintiff. 3. For the sake of convenience, the parties are hereinafter referred as arrayed before the trial court. 4. The plaintiff filed the suit for recovery of money of Rs.14,00,000/- with interest at 12% per annum from the date of decree till realization with costs. The plaintiff contended that it was a private limited company doing the business of marketing and selling of seeds. It was having agents all over India for marketing the products and one of its marketing agent, by name, M/s. Om Sai Agro Marketing was located at Lucknow. During the course of its business, the plaintiff engaged the services of the defendant for transportation of products by its agents to Hyderabad and thus, four trucks load of agricultural seeds of maize were transported to Hyderabad on 16.07.2014, 17.07.2014, 23.07.2014 and 25.07.2014. The freight charges amounting to Rs.2,23,083/- was payable at the dispatch point. The said goods were delivered to the address of the plaintiff at Hyderabad in August, 2014. The defendant did not come forward to receive the freight charges from the plaintiff. In the meanwhile, the plaintiff also engaged the services of the defendant for transportation of the 5 th truck of maize seeds and the same was dispatched through consignment No.F410247 dated 29.09.2014. Even after waiting till December, 2014, the said stocks were not delivered by the defendant to the plaintiff. After verification and confirmation with the consignor, the plaintiff corresponded with the defendant about non-delivery of 5 th consignment which was of a value of Rs.20,00,000/-. The said stocks were perishable in nature as the seeds had to be protected and kept in moderate temperature in cold storage, otherwise they would be damaged and not useful. After verification and confirmation with the consignor, the plaintiff corresponded with the defendant about non-delivery of 5 th consignment which was of a value of Rs.20,00,000/-. The said stocks were perishable in nature as the seeds had to be protected and kept in moderate temperature in cold storage, otherwise they would be damaged and not useful. Through the correspondence, the plaintiff realized that the defendant had illegally detained and withheld the stocks sent through them in their godown and demanded the plaintiff for payment of freight charges and also issued notices to the plaintiff on 04.02.2015 acknowledging the receipt of the consignment and also expressed its intention to declare the consignment as unclaimed under Section 15 (1) of the Carriage by Road Act , 2007 and to sell the consignment if the amounts were not paid within seven days and that he would auction the goods worth Rs.20,00,000/- for recovery of Rs.2,79,879/-. The plaintiff had given reply notice through their counsel on 11.02.2015 by narrating the true facts and also brought to the notice of the defendant that the goods had to be safeguarded and protected to avoid germination as the entire material would lose its value and that the defendant could not withhold the stocks without delivering the consignment to the plaintiff causing enormous loss to the plaintiff and expressed through the legal notice that the plaintiff was ready to pay the freight charges and requested to deliver the truck load of maize seeds immediately to avoid further complications and warned the defendant that if the material was damaged, it would be worthless and the damages had to be paid by the defendant. The defendant communicated to the plaintiff by letter dated 25.03.2015 that auction would be held on 10.04.2015 and that the bids would be called before 06.04.2015 and invited the plaintiff for participation in the same. The plaintiff further submitted that the defendant filed Company Petition No.114 of 2016 under Section 433(e)(f) and 439(c) of the Companies Act for winding up of the plaintiff company. The plaintiff contended that the defendant could not retain the stocks consigned through it and could not put them to auction and realize the amounts and again claim for the freight charges instead of returning the remaining balance received by putting to auction of the stocks. The plaintiff contended that the defendant could not retain the stocks consigned through it and could not put them to auction and realize the amounts and again claim for the freight charges instead of returning the remaining balance received by putting to auction of the stocks. As such, he was entitled to claim damages from the defendant, but was confining itself for the loss of the value of the goods by deducting the amounts payable towards freight charges, which would come to Rs.14,00,000/- as per the books and statement. 5. The defendant filed written statement admitting that the plaintiff had engaged his services for transportation of its agricultural seeds and booked the consignment under five trucks on 16.07.2014, 17.07.2014, 23.07.2014 and 25.07.2014 and 29.09.2014 and agreed to pay an amount of Rs.2,79,879/- and assured the defendant that as and when the defendant delivered the seeds at Hyderabad, the plaintiff company would pay the delivery charges upon raising the invoices at Hyderabad. As per the terms and conditions agreed upon between them, the defendant company had to deliver the material from Kanpur to Hyderabad. The plaintiff company fell due an amount of Rs.2,79,879/- to the defendant as such, the defendant company filed Company Petition No.114 of 2016 before the High Court to wind up the plaintiff company and to appoint an official liquidator to take possession and assets of the plaintiff company and the same was pending. The defendant further submitted that the consignment pertaining to F410247 dated 29.09.2014 worth of Rs.10,00,000/- reached the delivery location on 09.12.2014. The defendant tried to deliver the said consignment on 10.12.2014, but the plaintiff refused to take the consignment, as such the same was declared as unclaimed. The defendant sent an E-mail dated 29.11.2014 to the plaintiff directing the plaintiff to pay the transportation charges towards transportation of seeds through five trucks. The defendant by letters dated 09.01.2015 and 20.03.2015 requested the plaintiff to receive the material and to pay the transportation charges. But, there was no positive response from the plaintiff to the above letters. Inspite of several reminders and requests, the plaintiff company defaulted in payment of transportation charges to the defendant. The defendant by letters dated 09.01.2015 and 20.03.2015 requested the plaintiff to receive the material and to pay the transportation charges. But, there was no positive response from the plaintiff to the above letters. Inspite of several reminders and requests, the plaintiff company defaulted in payment of transportation charges to the defendant. The plaintiff company issued a letter dated 10.01.2015 wherein instead of agreeing to pay the transportation charges further demanded the defendant for delivery of the consignment immediately at the destination which was not justifiable, as such prayed to dismiss the suit. 6. Basing on the above pleadings, the trial court i.e. the IV Senior Civil Judge, City Civil Court, Hyderabad framed the issues as follows: i) Whether the plaintiff is entitled to recover the amount of Rs.14,00,000/- from the defendant together with interest? ii) To what relief? 7. The Regional Manager of the plaintiff company was examined as PW.1 and Exs.A1 to A16 were marked on behalf of the plaintiff. The H.R. Manager of the defendant company was examined as DW.1 and Ex.B1 was marked on behalf of the defendant. 8. On considering the oral and documentary evidence on record, the trial court decreed the suit in part against the defendant with costs for a sum of Rs.7,76,917/- and directed the defendant to pay the said amount within two months from the date of the judgment, failing which ordered that the plaintiff would be entitled for interest at 6% per annum from the date of judgment till the date of realization. 9. Aggrieved by the said judgment and decree, the defendant preferred this appeal. 10. Notice sent to the respondent-plaintiff was returned with an endorsement as ‘unclaimed’. As such, considering it as deemed service, this Court proceeded to decide the appeal on merits. 11. Heard Ms. Samhitha Nimmada, learned counsel representing Sri Vivek Jain, learned counsel on record for the appellant-defendant. 12. The learned counsel for the appellant-defendant contended that the trial court erroneously decreed the suit without considering the rights and obligations of the parties to the contract and that the respondent breached the contract by non-payment. Without considering the plea of the appellant-defendant that it had rightly withheld the 5 th truck since the respondent-plaintiff failed to pay the transportation charges for the previously delivered four trucks, partly decreed the suit. Without considering the plea of the appellant-defendant that it had rightly withheld the 5 th truck since the respondent-plaintiff failed to pay the transportation charges for the previously delivered four trucks, partly decreed the suit. The appellant- defendant was not responsible for the damage caused to the goods since it was the respondent-plaintiff who breached the contract. In the entire judgment of the trial court there was no reference to breach of contract or assessment of rights and obligations of the parties to the contract. It was first necessary to ascertain the point of time the payment of the four trucks became due. As per the case of the respondent-plaintiff itself, freight charges have to be paid at the dispatch point, but the respondent-plaintiff had set up a different case in its cross-examination claiming that the payment was to be made within 45 to 90 days. Even assuming that the business between the appellant-defendant and the respondent-plaintiff was done on credit basis, the maximum time period for payment was 90 days and the said time period ended in December, 2014 from September, 2014. The trial court erred in not considering the inconsistencies in the respondent-plaintiff’s case as to when the freight charges became due. The respondent-plaintiff, failed to discharge the burden of proof laid upon them that the appellant breached the contract. The appellant was entitled to withhold the delivery of 5 th truck by exercising the right of lien under the Carriage by Road Act , 2007 and relied upon the judgment of this Court in Pulavarthi Sitarama Murthy and another v. Bangaru Sobhanadri and another , CRP No.88 of 1949 dated 14.07.1950 wherein the High Court had dismissed the plaintiff’s case for damages and held that breach of contract had to be proved by the plaintiff prior to seeking the damages. She further relied upon the judgment of the Hon’ble Apex Court in Tarini Kamal Pandit and others v. Prafulla Kumar Chatterjee (dead) by Legal Representatives, 1979 (3) SCC 280 on the aspect that pure question of law not involving any investigation of facts can be raised at any stage. 13. Now the points for consideration are: i) Whether the respondent-plaintiff is entitled to recover the amount of Rs.14,00,000/- as claimed for? ii) Whether the trial court committed any error in decreeing the suit in part holding the defendant liable to pay damages of Rs.7,76,917/- with costs? 14. 13. Now the points for consideration are: i) Whether the respondent-plaintiff is entitled to recover the amount of Rs.14,00,000/- as claimed for? ii) Whether the trial court committed any error in decreeing the suit in part holding the defendant liable to pay damages of Rs.7,76,917/- with costs? 14. Point No.1: The plaintiff filed the suit for damages on the ground of breach of contract. To ascertain whether a party is liable for pecuniary loss or not, the court first need to look into the rights and obligations of the parties to the contract and whether the loss suffered by the aggrieved party was because of the breach committed by the other party and thereafter proceed to quantify the damages. 15. As seen from the facts of the case, there was no dispute that the plaintiff engaged the services of the defendant for transportation of agricultural seeds of maize from his agent at Kanpur to Hyderabad and four trucks load of seeds were delivered on 16.07.2014, 17.07.2014, 23.07.2014 and 25.07.2014. It was also not in dispute that the 5 th truck of maize seeds was dispatched through consignment No.F410247 dated 29.09.2014 and the plaintiff was due an amount of Rs.2,79,879/- to the defendant towards freight charges of consignment of five trucks. It was also admitted that the freight charges for the earlier four trucks were not paid by the plaintiff to the defendant by the date of consignment of the 5 th truck. 16. The Regional Manager of the plaintiff company examined as PW.1 admitted that the freight charges amounting of Rs.2,23,083/- for four trucks was payable at the dispatch point and that the said goods were delivered at their address in Hyderabad in August, 2014. His contention was that they had booked the consignment for transportation of maize and other crop seeds on 29.09.2014, but even though they waited till December, 2014, the said stocks were not delivered by the defendant to their Hyderabad address. He stated about the letter addressed by their company to the defendant on 10.01.2015 marked under Ex.A3 requesting to deliver the consignment held by them immediately at the addressed destination and to get their payment through office. In the said letter itself, in the first line, it was mentioned that the letter was addressed with reference to the letter addressed by the defendant on 27.12.2014 regarding the pending dues. In the said letter itself, in the first line, it was mentioned that the letter was addressed with reference to the letter addressed by the defendant on 27.12.2014 regarding the pending dues. Thus, no efforts were made by the plaintiff company to pay the due amount of Rs.2,23,083/- payable by them for the four trucks before seeking delivery of the goods consigned through 5 th truck and further asked the defendant to deliver the consignment of the 5 th truck and then thereafter, they would clear the dues. PW.1 in his cross examination admitted that the four trucks were delivered and that they received the invoices but the amount was not paid. With regard to the mode of payment, he stated that after door delivery of products they received the invoices from the defendant and thereafter within 45 to 90 days they used to make the payments. This part of the evidence of PW.1 was against his own pleadings that the amount was payable at the dispatch point. Even if the same is considered as true, the period of 90 days would end by December, 2014 from the date of the 5 th consignment on 29.09.2014. Ex.A2 itself would disclose that the correspondence was initiated by the defendant to the plaintiff regarding the pending dues on 27.12.2014 and it was not the plaintiff who approached the defendant for delivery of goods by making payment of the due amount. The correspondence made by the plaintiff to the defendant under Ex.A2, A3 and A7 seeking delivery of the goods without making any payment for the goods received by them for the earlier consignments is untenable, as admittedly, the four trucks were already delivered in August, 2014 and the defendant had discharged its obligation under the contract. It was the plaintiff who breached the contract by not paying the freight charges for the already delivered four trucks even after the amounts became due. 17. As seen from Section 15 of the Carriage by Road Act , 2007, the common carrier of the goods had lien over the goods when the consignee fails to make payment of the freight. Section 15 of the Carriage by Road Act , 2007 reads as follows: “15. 17. As seen from Section 15 of the Carriage by Road Act , 2007, the common carrier of the goods had lien over the goods when the consignee fails to make payment of the freight. Section 15 of the Carriage by Road Act , 2007 reads as follows: “15. Right of common carrier in case of consignees default:- (1) If the consignee fails to take delivery of any consignment of goods within a period of thirty days from the date of notice given by the common carrier, such consignment may be deemed as unclaimed: Provided that in case of perishable consignment, the period of thirty days shall not apply and the consignment shall be deemed unclaimed after a period of twenty--four hours of service of notice or any lesser period as may be mutually agreed to by and between the common carrier and the consignor. (2) In the case of an unclaimed consignment under sub-section (1), the common carrier may, (a) If such consignment is perishable in nature, have the right to sell the consignment; or (b) if such consignment is not perishable in nature, cause a notice to be served upon the consignee or upon the consignor if the consignee is not available, requiring him to remove the goods within a period of fifteen days from the date of receipt of the notice and in case of failure to comply with the notice, the common carrier shall have the right to sell such consignment without any further notice to the consignee or the consignor, as the case may be. (3) The common carrier shall, out of the sale proceeds received under sub-section (2), retain a sum equal to the freight, storage and other charges due including expenses incurred for the sale, and the surplus, if any, from such sale proceeds shall be returned to the consignee or the consignor, as the case may be. (4) Unless otherwise agreed upon between the common carrier and consignor, the common carrier shall be entitled to detain or dispose of the consignment in part or full to recover his dues in the event of the consignee failing to make payment of the freight and other charges payable to the common carrier at the time of taking delivery.” 18. (4) Unless otherwise agreed upon between the common carrier and consignor, the common carrier shall be entitled to detain or dispose of the consignment in part or full to recover his dues in the event of the consignee failing to make payment of the freight and other charges payable to the common carrier at the time of taking delivery.” 18. Thus, the defendant is entitled to detain or dispose of the consignment in part or in full to recover his dues in the event of the consignee failing to make payment of the freight payable to the common carrier. Thus, the defendant had not committed any breach of contract entitling the plaintiff to claim damages. 19. But, however, as seen from Section 15 (3) of the Act, though the common carrier had the right to sell the consignment, he shall out of the sale proceeds received under Section 15 (2) can retain the sum equal to the freight, storage and other charges due including the expenses incurred for the sale but the surplus from such sale proceeds shall be returned to the consignee. But, the evidence of DW.1 is silent on this aspect. Though the correspondence made between the parties would disclose that the defendant addressed a letter to the plaintiff on 25.03.2015 under Ex.A5 asking the plaintiff to participate in the bid stating that an auction would be held on 10.04.2015, no evidence was adduced as to for what amount the goods were sold and the expenditure incurred by them for issuing notification, conducting auction etc. 20. The plaintiffs pleaded that the worth of the goods transported through the 5 th consignment was of a value of Rs.20,00,000/-, but the statement filed by them marked under Ex.A6 would show the value of the goods as Rs. 14,12,528/-. PW.1 admitted in his cross examination that though the worth of the product in the 5 th consignment was shown as Rs.14,00,000/- in Ex.A6 statement, it was shown in the delivery challan as Rs.10,00,000/-. PW.1 also admitted that Ex.A6 was a self prepared document and that they had not stated the value of the goods in the legal notice issued by them to the defendant though they made the correspondence 2 to 3 times. PW.1 also admitted that Ex.A6 was a self prepared document and that they had not stated the value of the goods in the legal notice issued by them to the defendant though they made the correspondence 2 to 3 times. As the delivery challan dated 25.09.2014 marked under Ex.A16 pertaining to F410247 would disclose the value of the goods as Rs.10,00,000/-, the same can only be taken into consideration. As both the parties admitted that the freight charges for delivery of five trucks would amount to Rs.2,79,879/-, the said amount can be deducted by the defendant. As the defendant must have incurred some amount towards the expenses for issuing notification, conducting auction etc., he is entitled to an amount of Rs.20,000/- (approximately assessed in the absence of any evidence adduced by them) in addition to the amounts due to them. Hence, the defendant need to pay the balance amount of Rs.7,00,121/- (Rs.10,00,000/- - Rs.2,99,879/- (Rs.2,79,870 + Rs.20,000/-)) under the principle of unjust enrichment. It was unjust for the defendant to keep the benefit as it is against the principles of fairness and equity. As the defendant failed to return the balance amount received by him, the plaintiff is entitled to claim the same. As such, this Court is of the view that the plaintiff is entitled for recovery of the balance amount of Rs7,00,121/- only from the defendant which was withheld by the defendant after deducting the amounts due to them. Point No.1 is answered accordingly. 21. Point No.2: Though the trial court had not discussed the rights and obligations of the parties to the contract and which party committed breach and whether the loss suffered by the aggrieved party was because of the breach committed by the other party, came to a right conclusion that the plaintiff was entitled for the loss of value of the goods sold by the defendant after deducting the freight charges. The observations of the trial court that non- payment of the charges for the first four trucks would not automatically give any right to the defendant to withhold the products, is not correct. The trial court had not considered the provisions of the Carriage by Road Act , 2007 under which defendant has a right of lien to recover his dues. The said provision was also mentioned by the defendant in their correspondence to the plaintiff, marked by the plaintiff himself, under Ex.A3. The trial court had not considered the provisions of the Carriage by Road Act , 2007 under which defendant has a right of lien to recover his dues. The said provision was also mentioned by the defendant in their correspondence to the plaintiff, marked by the plaintiff himself, under Ex.A3. The observations of the trial court that the defendant failed to deliver the products inspite of several correspondence and caused loss by withholding the charges payable by the plaintiff for the four trucks, are incorrect and against the law on this aspect. As such, the same are liable to be set aside. The observation of the trial court that, as the goods in the fifth truck were not delivered, the defendant was not liable for the said amount, is also not correct as the defendant exercised his right of lien over the products and he had transported the goods all the way from Kanpur to Hyderabad. The trial court deducting an amount of Rs.2,23,083/- towards the freight charges of only four trucks by excluding the freight charges of the fifth truck is also not correct. As such, the judgment of the trial court is liable to be set aside on these aspects. 22. In the result, the Appeal is allowed in part modifying the judgment and decree dated 16.03.2018 in OS. No.638 of 2016, passed by the IV Senior Civil Judge, City Civil Court, Hyderabad, holding that the defendant is liable to pay a sum of Rs.7,00,121/- with interest @ 6% per annum from the date of suit till realization. The defendant is directed to pay the said amount to the plaintiff within a period of two months from the date of receipt of a copy of this judgment. No costs. Miscellaneous Applications pending, if any, shall stand closed.