DECCAN QUEEN MOTOR SERVICE Vs. INDIAN OVERSEAS BANK

JUDGEMENT

(1.) The 3rd defendant in O.S. No. 87 of 1975 is the appellant. The plaintiff and defendants 1 and 2 are the respondents. The suit was decreed against all the three defendants holding them jointly and severally liable for the amounts claimed by the plaintiff. The 3rd defendant is a carrier of goods. Goods consigned by the first defendant to himself were entrusted by him with the 3rd defendant for carriage from Chalisseri (Trichur) to Bombay. "Goods consignment note", Exts. A-14 to A-21, were issued by the 3rd defendant in favour of the first defendant. The term "the consignee's copies of this set is intended to be assigned or negotiated with a bank'' is printed in red on the face of each note. The notes were subsequently negotiated by the first defendant in favour of the plaintiff-bank, as seen from his signature on the back of the notes, and along with them the relative promissory notes and invoices were also handed over to the bank. As the goods consigned to Bombay had not reached their destination and their whereabouts were unknown to the bank, lawyer's notices were caused to be sent by the bank to each of the defendants for payment of the value paid by the bank to the first defendant under the relevant documents. The second defendant is the wife of the first defendant and she had executed a guarantee in favour of the bank to the extent of Rs. 15,000.

(2.) The bank's case is that defendants 1 and 2 are liable to the bank by reason of the first defendant having discounted the notes and on the strength of contract or security. The bank further contends that the 3rd defendant is liable to reimburse the bank the loss sustained by it owing to the loss of the goods.

(3.) Neither the first defendant nor the second defendant has challenged the decree passed against them. The contention of the 3rd defendant, the appellant, is that the goods entrusted with it by the first defendant were returned to him for non payment of freight. The first defendant alone is therefore liable in respect of the goods. If the bank ha suffered loss on "account of the failure of the first defendant to pay the freight and have the goods transported, it should look to the first two defendants for reimbursement.