SHAW WALLACE Vs. NEPAL FOOD CORPORATION

JUDGEMENT

(1.) Shaw Wallace & Co. Ltd., the appellant herein, was the second defendant in suit No. 922/1979 filed by Nepal Food Corporation ('NFC' for short, plaintiff in the suit and first respondent herein) for recovery of 1,26,38,951/06. UPT Imports Exports Ltd., the second respondent herein, was the first defendant in the said suit. The appellant filed this appeal by special leave, aggrieved by the judgment dated 14.9.2001 of a division bench of the Calcutta High Court dismissing its appeal (Ap.No.323 of 1988) against judgment and decree dated 9.9.1987 passed by a learned single Judge of that court decreeing the suit filed by the first respondent in part. For convenience we will also refer to the parties by their ranks in the suit.

(2.) NFC entered into a contract dated 7.12.1977 with Ngoh Hong Hang Pvt. Ltd., Singapore (for short 'NHH' or the 'buyer') for sale of 10000 MT of parboiled rice-1978 crop, (as also other quantities of rice). As per the contract, the payment was to be made by the buyer by establishing an irrecoverable confirmed and transferable letter of credit confirmed by Rashtriya Banijya Bank, Kathmandu in US dollars in favour of the seller allowing part payment. The contract provided that the payment 100% invoice value shall be made at sight at the seller's bank on presentation of 'on board Bills of Lading' (or charterparty Bills of Lading) supported by seller's commercial invoice. In pursuance of it, Bangkok Bank Ltd., Hong Kong who were the buyer's bankers, issued an irrecoverable letter of credit dated 25.4.1978 (amended/extended on 25.5.1978 and 31.8.1978) for US $ 21,60,000, in regard to the price of 10000 MT of Nepal paraboiled rice. The validity period of the said letter of credit was originally upto 30.6.1978, the last date for shipment being 20.6.1978. This was extended from time to time and the validity period of the letter of credit was extended from time to time, finally up to 15.1.1979, with the last date for shipment being extended to 31.12.1978.

(3.) UPT Imports Exports Ltd. was the owner of the vessel - ' M.V. Pichit Samut'. Shaw Wallace represented itself to be the agent of the owner of the vessel. The said vessel 'Pichit Samut' was chartered by NHH (buyer of rice from NFC) from the owner of the vessel under charterparty agreement dated 11.10.1978 for carrying 5000 MT of rice to be shipped by NFC to NHH, from Calcutta to Penang, Malaysia. M/s Grand Fortune Singapore Private Ltd., (for short 'Grand Fortune') was the general agent of the owner of the vessel. In accordance with Charterer's request to assign the said vessel under the agency of appellant for the said fixture, the said general agent acting on behalf of the owners, appointed Shaw Wallace (second defendant) as the 'Owner's Protective Agent' on 16.10.1978. Shaw Wallace was also acting as the charterer's agent as per charterer's request dated 3.1.1979. M/s Asian Agency was the agent of the seller (NFC) who was the shipper of the goods.