BANK OF BARODA Vs. JAILAXMI ROAD SERVICES

JUDGEMENT

(1.) The Bank of Baroda has sought recovery of Rs. 12,63,989.42 against M/s Jailaxmi Road Services Pvt.Ltd. and others. Brief facts as given in the plaint are that defendant No. 2 M/s Stitch Art Exports (P) Ltd. sought for credit facilities from the plaintiff bank. The same was granted on 15th February, 1978 in the nature of packing credit limit, demand loan and inland letters of credit facilities for Rs.8 lakhs. Letter of credit in favour of Bombay Dying and Manufacturing Co.Ltd., Bombay (in short the Company) was also opened to enable defendant No.2 to make their purchases of cloth from the Company in order to manufacture the garments for export. Defendant No.2 asked for enhancement of these limits and credit facilities from time to time which were acceded to by the plaintiff bank. On the request of the said defendant, plaintiff opened both clean and documentary letters of credit. Some of the letters of credit were in the name of Company, others were in the name of Loyal Textile Mills Ltd., Kovilapatti and Madura Coats Ltd. Ambasamudram. These beneficiaries were authorised and empowered to negotiate their bills for the goods sold to defendant No.2 upto the amount secured under letter of credit- Bills could be negotiated on their presentation of invoices/ bills or the original Motor transport receipts (in short 'lorry receipt'). These consignments by the beneficiaries were to be despatched through the approved motor transport agency. The defendant No. 1 was one of the said approved transport agency authorised to transport goods and issue lorry receipts for the goods entrusted to it. It is further the case of the plaintiff that defendant No.l was bound to deliver the goods only against production of such original lorry receipts issued by it. On receipt of lorry receipt and documents of title, the same used to be presented to defendant No. 2 by the plaintiff. The defendant No. 2 after retiring the documents against payment and on presentation of original lorry receipt would become entitle to receive the goods from defendant No.l.

(2.) Defendant No. 2, however, did not retire some of such documents and the original lorry receipts remained with the plaintiff. The plaintiff holder of the documents of title of goods was entitled to take delivery of goods under the lorry receipts from defendant No. 1, who being approved carrier transported the goods for reward from place to place. Defendant No. 1 had undertaken to deliver the goods to consignee-plaintiff bank or on its order to its assignees and endorsee only on presentation of original lorry receipts. Defendant No. 1 was under obligation to deliver the goods only on production of original lorry receipts and not otherwise. But the said defendant failed to discharge his obligation. Hence legal notice was served on defendant No. 1 on 20th February, 1985. In its reply the said defendant confirmed the factum of entrustment of goods for transportation and also admitted that the goods had been wrongly and without presentation of original lorry receipts were delivered to defendant No.2. In fact, defendant No.l & 2 conspired with each other thereby the defendant No.l fraudulently delivered the goods even without original lorry receipt to defendant No.2. Defendant No.l admitted that the consignment was not available with him and had been delivered to defendant No.2. Hence defendant No.l, the carrier having committed breach of trust is liable to pay the value of the goods lost to the plaintiff. Defendants 3 to 5 being guarantors of defendant No.2 are jointly and severally liable for the loss caused to the plaintiff. Hence the suit.

(3.) Defendants contested the suit by filing their written statements. Defendant No. 1 beside contesting the suit on merits took the plea that this Court has no territorial jurisdiction to entertain the suit because entrustment of the goods for transportation took place at Bombay. The lorry receipts were also issued at Bombay. The registered office and principal place of business of defendant No.l is also at Bombay. Moreover, the consignments were to be delivered at Calcutta and Madras. This Court has no jurisdiction to try this suit because no cause of action accrued within the territorial jurisdiction of this Court. Secondly, no legal and valid notice under Section 10 of the Carriers Act (in short Act) has been served on the defendant No.l. In the absence of this statutory notice suit is liable to be dismissed. Alleged notice dated 20th February, 1985 is beyond the statutory period of six months hence not valid. The suit is barred by time in respect of the consignments booked against serial No. 1 to 19. These consignments were despatched immediately and arrived at the destination within a week, but the intended consignees failed to retire the documents and consequently delivery of the goods was not taken. Consignees should have taken delivery within 10 days of the booking but he did not do so, hence the defendant was not responsible for the non-delivery or for loss of goods to the plaintiff. The goods reached the destination in June, 1982 itself whereas beneficiaries requested the defendant to revalid all the said G.C. notes in order to represent the same to the plaintiff bank. Against the original G.C. notes, the defendant issued fresh G.C. notes bearing the same serial numbers in lieu of the original. On merits it has been pleaded that since the goods covered by G.C. notes No.29031 and 29203 were received at destination in Calcutta and were not taken delivery of by the consignee therefore.the goods started incurring demurrages/ storage charges. The defendant No.2 approached the defendant No. 1's Calcutta office and requested to hand over the goods for storage, on behalf of the defendant No. 1 till the original "for delivery/ consignee" copies of G.C. notes/ LRs were surrendered. Defendant No. 1 in order to save the goods from damage in the store of the defendant No. 1 agreed to the suggestion given by defendant No.l. Defendant No.2 offered to retain and store the goods carefully at his risk, cost and responsibility. Defendant No.2 offered to act as defendant No.l's trustee and bailee and undertook not to use, deal with or dispose of the same untill original G.C. notes were surrendered. Defendant No.l had carrier's lien over the said consignments and was within his right to0 remove those goods at any time. In the event of any loss defendant No.2 was liable. It was on this assurance and undertaking given by defendant No.2 that Calcutta office of defendant No. 1 handed over the consignment to defendant No.2 for storage as bailee/ trustee on 10th July, 1982. Similar arrangements were made with defendant No.2 regarding consignment of G.C. note No.29173, 29578 at Calcutta and 010385 at N.Delhi. Remaining consignments were neither claimed by plaintiff nor by defendant No.2. Those consignments were lying with defendant No.l at their respective destinations. In reply to plaintiffs notice this fact was informed to plaintiff alongwith undertakings furnished by defendant No.2. Defendant No. 1 offered to deliver the subject consignments to the plaintiff, on plaintiffs surrendering the original documents and paying the charges of the defendant No.l. But the plaintiff did not do so. Hence defendant No. 1 was not liable for any amount. It has been denied that plaintiff paid Rs.9,50,403.67P to the beneficiaries. In fact plaintiff has already recovered Rs.1,26,569.35P from defendants 2 to 5.