Dismissed

Dhanesh B.Jain v. Ace Lines Ltd.and Ors.

Bombay HC18 Feb 2009NMS/4008/2008

Case brief

AI extract

What is this about?

This Single Judge judgment disposed of a Notice of Motion by Defendant No.3 seeking rejection of the plaint under Order VII Rule 11 CPC. The court dismissed the motion, holding that the plaint disclosed a cause of action against the third defendant as a principal carrier, not merely as an agent.

What did the court decide?

Notice of Motion dismissed without costs; suit framed for issues.

Dhanesh B.Jain Vs Ace Lines Ltd.and Ors. — Contract and Commercial Disputes | Bombay HC (2009)

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bsb

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
O.O.C.J.

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NOTICE OF MOTION NO. 4008 OF 2008

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IN

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SUIT NO. 1861 OF 1997

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Dhanesh B. Jain

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... Plaintiff

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v/s

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1. M/s.ACE Lines Ltd.

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2. All Cargo Container Lines Ltd.

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3. All Cargo Movers (India) Pvt.Ltd.

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4. M/s. Walford Meadows Ltd.... Defendants
And

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All Cargo Movers (India) P. Ltd.... Applicant

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Mr.C.Balsara a/w Mr.Rajesh Talekar i/by K.Ashar & Co.
for the plaintiff.

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Mr.Ashish Kamat a/w Mr.Rohan Kelkar & Ms.Preety Singh
i/by M/s.A.Mehta Laljee & Co. for the Defendant No.3.

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CORAM: S.C.DHARMADHIKARI, J.

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DATED: 18TH FEBRUARY, 2009

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P.C.:

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1. This is a Notice of Motion by the defendant No.3
praying for rejection of the plaint by invoking the
powers of this Court under Order VII Rule 11 of the Code
of Civil Procedure, 1908.

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2. It is urged in support of this Notice of Motion
that, for the purposes of considering the request of the
defendant No.3, the plaint allegation be taken as they
are. Proceeding on the basis that what is stated in the
plaint is true, at this stage, the Court must find out
the real purpose of impleadment of defendant No.3. If
the defendant No.3 has been impleaded only as an Agent
of a disclosed principal, then by invoking Section 230
of the Indian Contract Act and relying upon the rulings
of this Court, it must be held that the plaint does not
disclose any cause of action as against Defendant No.3.

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3. Mr.Kamat, learned counsel for defendant No.3
contended that, a perusal of the Bill of Lading based
upon which the cause of action in the plaint proceeds
would show that at the foot thereof the 3rd defendant
has signed as an agent of the disclosed principal,
namely, defendant No.2. In all these circumstances, the
plaint cannot disclose any other cause of action as far
as the defendant No.3. Mr.Kamat invited my attention to
the averments in para 1 of the plaint and he also relied
upon paragraphs 8, 14 and 15 of the same to urge that
the plaint does not disclose any cause of action against
defendant No.3. Hence, it is urged by Shri Kamath that
the plaint allegations must be seen in the backdrop of

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the factual position. So seen, clever drafting should
not lead this Court into holding that a case is made out
against defendant No.3. The cause of action, if any, is
only on the basis of Agency and therefore the Motion be
allowed. Mr.Kamath has relied upon the following
decisions in support of the above contentions:-

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(1) I.T.C. Limited v/s Debts Recovery
Appellate Tribunal & others, reported in (1998)
2 SCC 70;

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(2) Jaytee Exports v/s Natvar Parekh Industries
Ltd., reported in A.I.R. 2001 Calcutta 150;

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(3) Samar Singh v/s Kedar Nath alias K.N.Singh
& ors., reported in 1987 (Supp) SCC 663;

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(4) Saleem Bhai & ors. v/s State of
Maharashtra & ors., reported in (2003) 1 SCC
557;

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(5) Sopan Sukhdeo Sable & ors. v/s Assistant
Charity Commissioner & ors., reported in (2004)
3 SCC 137;

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(6) Midland Overseas v/s m.v. "CMBT Tana" &
ors., reported in AIR 1999 Bombay 401;

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(7) Kohinoor Carpet Manufacturers v/s Forbes
Gokak Ltd. & anr., reported in 2002 (4)
Bom.C.R. 295.

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4. On the other hand, it is urged by Shri Balsara,
appearing for the plaintiff that the defendant No.3 is
picking up some portion and sentences from the plaint
that too from paragraph 1 and the other relied upon
without reading them together and as a whole. In these
circumstances, it is fallacious to contend that the

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plaint proceeds on the basis that defendant No.3 is sued
as an agent of the disclosed principal. For all these
reasons, the motion be dismissed.

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5. For properly appreciating the rival contentions, the
plaint averments have to be seen. The plaintiff is a
sole proprietor carrying on business in the name and
style of Mahavir Apparels. The 1st defendant is a
Company incorporated under foreign laws. The 2nd and
3rd defendants are also referred to in the cause title.
It is stated in paragraph 1 of the plaint that the 3rd
defendant has signed and issued the contract of carriage
for carrying the goods belonging to the plaintiff. It
is alleged that the 1st to 3rd defendants are
inter-related/sister companies and/or belong to or
managed by the same group. It is stated that the 4th
defendant is an agent of defendant Nos.1 to 3.

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6. Facts leading to the institution of the suit are set
out in paragraph 2 by pointing out that the plaintiff
entered into contracts with a Kenya based company for
sale of 6 consignments of cotton knitted fabrics of the
value set out in the said paragraph.

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7. Paragraph 3 of the plaint proceeds on the basis that
the plaintiff approached the 1st to 3rd defendants and

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entrusted the said 6 consignments to them for carriage
and delivery from the Port of Bombay to Mombassa. The
3rd defendant signed and issued 6 Bills of Lading.

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8. Thereafter in paragraph 4, it is stated that the
ships sailing from the Port of Bombay had arrived at
Mombassa. The 3rd defendants addressed two fax messages
to the 4th defendants specifically instructing them to
deliver the said 6 consignments only against
presentation of original Bills of Lading.

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9. Thereafter, the plaintiff learnt that the delivery
of the consignments was handed over without production
of Bill of Exchange and, therefore, the matter was taken
up with the 3rd defendant. In paragraph 5 of the
plaint, it is specifically stated that the plaintiff
requested the 3rd defendant to inform all concerned
through their Mombassa Agent not to release the goods
without production of the original Bills of Lading in
respect of the consignment.

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10. Firstly, it was informed by the 3rd defendant to
the plaintiff that the 6 consignments are yet to reach
Mombassa Port. They confirmed that delivery will not be
effected without production of the original Bills of
Lading. However, it is alleged that due to negligence

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and by wrongful and illegal delivery of the cargo
without production of the Bills of Lading, originals of
which are with the plaintiff, the defendants have caused
a breach of the contract. That is how the plaintiff has
sustained losses and damages. The matter was taken up
with the persons to whom the consignments were
delivered. The losses are quantified, after the
correspondence is referred, subsequently. It is alleged
by the plaintiff that the defendants have committed a
breach of their duties. They are also guilty of
conversion of the gooding belonging to the plaintiff in
connivance with the parties in which they were
interested. It is in these circumstances that the suit
is filed and an order and decree in terms of the prayers
is claimed against defendant No.3.

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11. As is well settled, it is not necessary to plead
evidence. The plaint allegations will be substantiated
on the basis of the documents relied upon by the
plaintiff. At this stage, there is no necessity to rely
on them in details or consider their evidentiary value.
Suffice is to state that the plaint allegations do not
indicate that this is a case where the plaintiffs are
sueing the 3rd defendant as an Agent of the disclosed
principal. There is substance in the contentions of
Mr.Balsara that the plaint allegations must be seen as a

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whole and that so seen and read this is a case where all
the defendants are sued in their capacity as carriers of
the consignment. In fact, the allegations proceed on
the basis that the 3rd defendants are also principals.

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12. It may be true, as contended and rightly, by
Mr.Balsara that the defendants, and more particularly
defendant No.3 can raise a plea that in effect the 3rd
defendant stood as an Agent of a Disclosed Principal.
That is how the case in their written statement
proceeds. It may be that, after an opportunity is given
to substantiate the pleas, that defendant No.3 may be
absolved from the liability to pay the sums demanded.
However, merely on the basis of some Endorsement on the
bill of lading, at this stage, the plaint allegations
cannot be displaced or brushed aside.

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13. It is not as if I am unaware of the settled
principles. Order VII of Rule 11 of the Code of Civil
Procedure can be invoked by the 3rd defendant even at
this stage. Merely because the written statement is
filed is no bar to invoke this power. However,
applicability of these principles would depend upon
facts and circumstances of each case.

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14. In the decision of I.T.C. Ltd. v/s Debt Recovery

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Appellate Tribunal & ors., reported in (1998) 2 SCC 70,
what the Supreme Court was considering was a request by
the Appellant before it. Request was that the order of
the Karnataka High Court, dismissing the writ petition
by the Appellant, should be reversed. The appellant had
approached the said High Court challenging the order of
the D.R.T. and D.R.A.T. rejecting its application
filed under Order VII Rule 11 of the Code of Civil
Procedure.

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15. The suit in question was filed by the Corporation
Bank against the appellant before the Supreme Court who
was the 5th defendant. The suit was filed against
defendants 1 to 4 who belong to one family as well as
the 5th defendant i.e. the appellant before the Supreme
Court. The relief claimed was recovery of a sum of
Rs.52,59,639.66 from defendants. The request of the
appellant before the Supreme Court was that the plaint
allegations proceed on the basis that at the request of
the original defendants 1 to 4, the Corporation Bank has
sanctioned Letter of Credit facility. The facility was
sanctioned to secure the payment towards supply of
cigarettes which were manufactured by the appellant
before the Supreme Court. The facility was sanctioned
and there were renewals from time to time. There were
certain additional facilities. It was submitted that

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the amounts, towards the facilities were appropriated by
the original defendants 1 to 4, against the goods
purportedly despatched by the appellant before the
Supreme Court to their buyers. That is how the plaint
proceeds and that has been referred to in para 7 of the
Supreme Court decision. Once again the Supreme Court
refers to para 14 of the plaint. After referring to the
settled principles while deciding such an application,
the Supreme Court then takes the plaint allegations as
they are and holds that the word "fraud" being used in
the plaint, does not in any manner indicate that the
appellant before the Supreme Court had shipped the goods
or that there was any other role of the said appellant
in the transaction. The plaint allegations essentially
project the mischief of the defendants 1 to 4 before the
Supreme Court. Therefore, the Corporation Bank had a
cause of action against them. On the basis of a general
and vague allegation, the plaint does not disclose any
cause of action against the 5th defendant, appellant
before the Supreme Court. It is in that context the
Supreme Court allowed the application of the appellant
before it and set aside the order of the Karnataka High
Court.

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16. On facts, this decision is distinguishable because
this is not a case where any apparent allegation has

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been made. This is not a case where any hidden intent
or purposes have to be noticed. This is a case where a
cause of action is specifically set out against the
third defendant. Whether the plaintiff succeeds in
proving the allegations or not is something which is not
relevant at this stage. Therefore, the decision relied
upon is clearly distinguishable.

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17. The other decisions need not be referred to as they
proceed to reiterate identical principles.

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18. The learned Single Judge’s view of this Court in
the case of Midland Overseas v/s m.v. "CMBT Tana" &

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ors., reported in A.I.R. 1999 Bombay 401, once again
must be seen in the background of the peculiar
circumstances, where the third defendants, before this
Court were impleaded only because they were shipping
Agents for and on behalf of the 2nd defendants. Same is
the case with the view taken by the learned Judge of the
Calcutta High Court.

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19. Once I am of the opinion that prima facie this is
not a case of the plaintiff suing the 3rd defendant as
an agent but as part and parcel of the parties entrusted
with a consignment of the plaintiff for onward delivery
and despatch and, therefore, holding them liable

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alongside others, the relief claimed in the notice of
motion cannot be granted.

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20. Notice of motion fails and stands dismissed but
without any costs.

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21. It must be clarified that all the observations and
findings are only for the purposes of deciding the
present notice of motion and should not influence the
Court while trying the suit. All pleas and defences of
both sides are kept open.

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22. Place the suit for framing issues on 5.3.2009.

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(S.C.DHARMADHIKARI, J.)

Dhanesh B.Jain v. Ace Lines Ltd.and Ors.

Case brief

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What did the court decide?

Dhanesh B.Jain v. Ace Lines Ltd.and Ors.

Case brief

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